Assembly Budget Subcommittee No. 2 on Human Services

We will bring this hearing to order. Welcome to the Assembly Budget Subcommittee Number 2 on Human Services, where we will be discussing the Governor's May Revise proposals. We have to recognize that tough times require a return to core values. So how will California protect our core values and the key investments we have made in stabilizing families during these years of budget growth? How will we ensure that these pauses, as well as cuts, do not destabilize families? How will we protect the stability of the very California families we have invested in over these past years?

Reductions to previously planned childcare and preschool expansions total over 1.5 billion ongoing General Fund in the May Revision. However, it is unclear if these proposed pauses also include the impacts of new child care contracts that have already been awarded but now apparently frozen by DSS at the May Revision.

We have concerns that there are no statutory provisions for the prior year budget agreements to serve 200,000 more children and the state subsidized childcare system by 2026-2027 and no proposed end to the pause toward this goal in the May Revision. Again, there is no statutory commitment to pay even a fraction of the true cost of care.

So as we talk about childcare, as we talk about the many programs that are meant to stabilize our population and to bring them out of a state of crisis, we want to hear how the Administration plans to prevent destabilization in our population, but also how we are going to prevent these pauses or delays from being just a dead end.

There's much work to be done. There's more much discussions to be had, but our values remain the same. We cannot and we will not balance this state's budget on the backs of our most vulnerable. So let us first turn to issue number one, childcare and preschool.

I want to invite the Administration, Department of Finance, LAO. As we get situated here, I also want to just make sure people know that public comment will be taken in person after the completion of all panels as well and any discussion from the Members of the Subcommittee. And you may begin when you're ready.

Good morning, Chair. Kim Johnson, California Department of Social Services. Just want to give also some very quick opening remarks in terms of the context of our conversation today. As you know, the Governor's May Revision proposes to solve two years of budget problems in a single budget, including deficits of 27.6 billion in 24-25 and 28.4 billion in 25-26. The proposed options include a combination of delays, deferrals, and shifts, but also ongoing reductions in several places to address the structural deficit.

The May Revision incorporates many reductions across the programs that the Department of Social Services administers that are undeniably challenging because, again, to your point, we serve people, as we've previously discussed, and people will be impacted. Through the course of today's conversation, we will aim to speak to the impact of the proposed reductions, how we will look to some of the additional programs and services that we have built together over the past five years that will continue to be available and utilized by those that we serve.

I'll note that we did aim to preserve the ability to address the immediate needs of people and are not proposing reductions to cash support such as CalWORKs grants or SSI/SSP. In several places, we have also identified our first priorities that can be added when resources are better and budget conditions change. But I also again want to underscore that these are proposals and we recognize through our collective efforts, we will come together to agree on a balanced budget.

So, turning to child care development and early learning programs. To your opening remarks, I do just want to say we continue to stand ready and work on the implementation of the alternative methodology, which is based on the cost of care, and that work continues. And you'll hear a little bit more about that in just a second. I'm going to turn it over to Chief Deputy Director Jennifer Troia for your remark to answer your questions in the agenda.

Good Morning, Mr. Chair and Members and staff. Jennifer Troia on behalf of the Department. As Director Johnson was just alluding to, we do administer a number of voucher and contract based childcare and development programs. The May Revision includes a total of 5.4 billion total funds or 2.6 billion General Fund in 23-24 for those programs and 5.9 billion total fund or 3.7 billion General Fund in 2024 to 25 for those programs.

The most significant change contained in the May Revision is the one that you alluded to with respect to pausing the multi-year slot expansion. Beginning in 2021 and 22 by way of contracts, the Legislature and Governor agreed to a multi-year plan to expand child care subsidies by 200,000 additional slots.

Since that time, around 118,000 of those new subsidies have materialized for the two largest CDSS funded programs. This includes the Alternative Payment Program or the voucher-based program. Before the slot expansion began, there were just a total of just over 56,000 children enrolled in the Alternative Payment Programs based on September 2021 data.

Based on March 2024 caseload data, there are around 142,400 children enrolled. In other words, this is 153% increase in the enrollment in the voucher programs. For the General Childcare Program, or CCTR, before the slot expansion, there were a total of 23,266 children served based on April 2022 data. Based on October 2023 preliminary data, there's 27,955 children enrolled.

This is a 20% increase in general childcare contracted slots. The May Revision proposes to continue funding all of those slots that have materialized from these recent expansions, while pausing further expansions for both the alternative payment program and the General Child Care Program to assist in closing the projected budget shortfall.

For the alternative payment program or the vouchers, the pause results in a reduction of 184 million General Fund in 24-25 compared to the Governor's Budget estimates. This reflects an estimated 16,000 slots. For general childcare, the pause results in a reduction of $278 million General Fund in 24-25, which reflects an estimated 12,000 contracted CCTR slots.

There is also a reduction proposed to the Emergency Child Care Bridge Program, but you have that slated, I think, to discuss in greater detail an issue number two on the agenda. Finally, the May Revision does also include some resources related to implementing chaptered legislation and reimbursement authority related to federal funding.

So, turning more specifically to some of the questions that you've asked on page six of your agenda, there is no proposed trigger for the slots to resume by the Governor's Budget. The assumption is that we would be, and I'll defer to my colleagues at the Department of Finance to add more to this, but the assumption is that we would be identifying the available revenues and re-triggering the undoing of the pause when revenues are available.

But I'll let my colleagues from Finance fill in more. With respect to the consequences of the what you've referred to as the prior awards being frozen, I just want to clarify. I think there's a little bit of confusion in the question. The applicants for the most recent general child care RFA received in late March of this year tentative award notifications, not contracts and not awards, for the CCTR program. Those are proposed award amounts that would begin this summer.

Our tentative notifications to those applicants referenced that it was not yet a contractual agreement and that no award amount would be finalized until contracts were fully executed and the final awards are subject to appropriation. We do intend to notify the contractors of the May Revision proposal this month for their planning purposes, but I just want to clarify again that we don't view this as freezing prior awards.

Those are awards for slots that have not yet been enrolled, recognizing there's still an impact of those families on the timing of when they will gain access. But we are not freezing prior year awards. With respect to the alternative payment voucher program, contractors have 24 months to enroll families with the prior year's augmented funds.

Many of them are still enrolling families with funds from 22-23, and some have begun enrolling from the 23-24 funds. There are no changes proposed to the ability of the CAP contractors to utilize those prior funds that are already in contract. You also asked some questions with respect to waitlists.

I think it's important to note that CDSS does not maintain a statewide, centralized eligibility list that would allow us to track the overall number of eligible children who may be waiting for a slot on a waitlist. I did reference earlier the number of slots that we expect to be impacted by the pause in terms of 24-25 funding, and if it's helpful, I'll just quickly repeat that. That was 16,000 CAP slots and 12,000 general childcare slots.

Depending on the timing of the ramp up for the field, of course, the overall pause could also impact more of the timing of the gap between the 118,000 that have materialized and the 200,000 that was the long term commitment over multiple years. You asked about authority we might need in order to shift to the alternative methodology. The Legislature and Governor did already enact legislation in 2023 that expresses our intent to utilize the alternative methodology and required us, in collaboration with CDE, to begin that process, which we have done.

We do have work to do together ahead in order to implement rates that will be informed by that new cost estimation methodology, but those changes are not yet ready to be identified in this Budget Act. You also asked about the timelines that remain outstanding in terms of that alternative methodology over the multi-year.

There are several milestones remaining related to what was enacted in SB 140. So by July 1 of this summer, we have specific things that we need to submit to the federal government, including our state plan and a request to exercise flexibilities. within 60 days of their approval of that state plan, We owe to you and to the child care providers united union an outline of the implementation components for the rate structure.

And with 90 days of approval, the state and CCPU will reopen negotiations to restructure the current subsidy reimbursement rates and rate setting for unrepresented providers will occur through the budget process. So, in short, we don't believe there is additional authority that we need in this Budget Act in order to continue the process that we have agreed to together. And that concludes my responses to your questions.

Thank you very much. Department of Finance.

Thank you, Chair. Gabby Santoro, Department of Finance. Just wanted to start and pull back and provide some high level context regarding our May Revision proposals. The May Revision to the Governor's Budget Proposal to bridge the additional shortfall that has been estimated since Governor's Budget in budget year as well as budget year plus one, which also has a significant deficit.

If the budget deficit were not addressed across these two fiscal years, we would be back in a matter of months developing another budget that would require even deeper cuts without as many potential solutions from which to draw. As the Governor had stated at the budget release, none of these solutions were made easily or lightly.

Our overall goal was to maintain core programs and base benefits. The May Revision reflects the preservation of base benefits for CalWORKs SSI/SSP base CFA foster care rates as maintained and filled childcare slots are maintained. As we consider solutions, we remain cognizant of programs that were not yet or are recently implemented. Another goal was to propose a balanced and responsible budget that puts us on strong footing going forward so that we may continue to support funding core programs in the future.

Like the Governor's Budget, the May Revision is a proposal, and we fully recognize that the Legislature may have alternatives, and we do look forward to discussions with the Legislature to come to a final budget agreement. And just want to echo comments made by Director Johnson and Deputy Director Troia. The intent of the proposal to pause slot expansion is just that.

We recognize that under the May Revision, our proposal is to continue this pause through the multi-year. However, it's not our intent to end the plan, just press pause. And as part of our regular budget development process of estimating expenditures against revenues, identify if there's an opportunity for sufficient funding to resume slot expansion. We're again open to discussing with the Legislature any alternatives to this proposal, including conditions for which we would consider unpausing the slot expansion. That's all, but please let us know if you have any other questions.

Thank you very much. LAO.

Jackie Barocio, Legislative Analyst's Office. As the Chair mentioned in the opening remarks, as a result of the slot pause, at least within the multi-year, we also have this similar understanding that it seems to be an indefinite pause that would include withdrawing slots that were approved in prior budgets, were proposed to be implemented beginning 24-25, but have not been put into contract yet.

The savings associated with this would be 489 million in 24-25, increasing to 1.5 billion on ongoing savings. We are working with the Administration to better understand why the $489 million in budget year savings seems seems to be $30 million higher than the slot costs that were included in the January Governor's Budget.

We also would note, and as the Chair noted as well, that while slots have not been put into contract, at least in the case of general childcare, tentative award letters were sent out totaling $277.7 million for about 12,000 slots. So if the proposed pause is approved, the Department would then need to rescind those award letters.

Again, they have not been put into contract, but would need to rescind those award letters. And additionally, in order to just provide more context on the status of slot expansion across the entire early childhood education field, we would note that the Administration is maintaining new state preschool slots. That's similar to the general childcare slots. These were authorized originally in 21-22 and are expected to be awarded and implemented in 24-25. The difference really is the fund source, where the state preschool slots are funded with Proposition 98 dollars.

Lastly, I'll just also flag that we're working to better understand how the proposed withdrawal may be impacting any implementation activities associated with those award letters. Our understanding is that the Department is also holding back on working on putting those awarded slots into contracts until the final deliberations of the budget process. Our question then is, to the extent that through the budget process we do maintain that funding, what delay in implementation would we expect? Thank you.

We'll go down to questions from Members. Mr. Lee, you're recognized.

Thank you very much, Mr. Chair. Today, I think, as Administrators talked about, I have a lot of concern with most of the proposals because how they'll affect disproportionately working class Californians, and especially in this regard when it comes to parents and children.

I have one question about this one, but I did, sorry that I missed the opening comments. I did have an ask of many of our speakers are gonna be the same folks over and over is if, when we talk about the budget, about reductions, positively fun shifts sometimes, some of the programs I understand are eliminations.

And if they are proposed to be an elimination of program, throughout the day, not just in this section I'm saying, if you could be clear about that, just for the public and for us to understand that if you're proposing elimination, it's elimination rather than a budget cut, which is very different.

So anyways, expressing a lot of my concern on these issues, but I did want to ask the Administration to respond about how LAO said that this year the cost savings, 489 million is what you're proposing, but that is 30 million more. If you have a response about that aspect to it.

Tamar Weber, Department of Finance. So the reason it's 30 million more is because when we were developing the May Revision, we had adjustments to how much the expansion slots would cost in 24-25. And so when we had to decide that we were going to propose to pause the slots, we used those revised numbers. So the revised numbers are 30 million higher.

I'll just add, Jennifer Troia on behalf of the Department of Social Services, that while we often talk about things in terms of slots, the budgeting is usually in terms of dollars, but each slot has a differential cost based on the age of the child, the geography of where they're located. And so as our information is updated, sometimes the dollars and the slot numbers change.

LAO.

As I mentioned, we are in the process of scheduling a follow up meeting with DSS to get a better understanding of the dollars, understanding that the 489 may reflect an updated cost estimate. But again, the May Revision is meant to pull back dollars that were budgeted in the Governor's Budget. So if that reflected a lower cost estimate, if we're scoring a higher savings, that then would actually be cutting into slot costs that are within the base. So we'll be following up with the Legislature to ensuring that the numbers are tying out.

In regards to the discussion about the Administration being amenable to a trigger, we would actually like to, I would like to make sure that we work with LAO to see how we might be able to work on trailer bill language or language within the budget to be able to Institute a trigger to make sure that we continue to express our high priority of ensuring, as budget times get better, that child care should be one of the first in line so that we can make sure that we are safeguarding the resiliency of our communities, but also, of course, our children and their families. Any other discussion on this item?

Good morning, Chair and Members. Stephen Propheter with the California Department of Education on behalf of the State Superintendent of Public Instruction. I prepared a statement on the preschool items which were included in this item, if I may. Wonderful. So we appreciate the Administration's commitment to education overall and to universal pre-kindergarten in particular.

As we move forward through the May Revision and towards the final Governor's Budget, we understand that there are many challenges and difficult decisions that come with the present budget shortfall. However, we did want to highlight one proposed elimination that is particularly problematic, and that is the proposed elimination of $250 million in the Inclusive Early Education Expansion Program. These are funds that were broken into a few buckets. First, 198 million for local grantees to support effective practice and inclusion in early education, what's currently oversubscribed.

We received 207 million in requests for these funds. Applicants have written plans that will reach early learning and care programs, including communities of historically and contemporarily marginalized racial and ethnic groups, as well as tribal and rural communities. There's a bucket that would fund 50 million in statewide system supports for inclusion to benefit both LEAs and community based programs.

So statewide investments to support the requirement to serve children with disabilities, as well as new regulations around suspension and expulsion in early learning and care programs, as well as a rollout of the Classroom Assessment Scoring System tool with a deeper focus on inclusion and supporting interactions and instructional practices with children with disabilities.

This includes funding for sustainable, evidence-based professional development and resource development on inclusion and social emotional development, as well as 10 and a half million for supporting implementation of the Classroom Assessment Scoring System to ensure that it's implemented in a way that supports effective, inclusive practices for children with disabilities.

We say this because the state's ECE early childhood education system currently lacks the sufficient funding and resources to meet mandates around serving children with disabilities, as well as eliminating harmful exclusionary practices around suspension and expulsion. These funds bring us closer to closing that gap.

We also recognize that the May Revision includes an elimination of the requirement for state preschool programs to enroll up to 10% of their enrollment for children with disabilities. We would urge the Legislature to delay the phase in rather than to halt it altogether. California lags, in terms of the nation comparing with California with the nation, we lag in terms of inclusion in pre kindergarten with only 14% of children in inclusive programs, while the national average is 41%.

In terms of what the CDE needs to support the alternative methodology moving forward for state preschool rates, as my colleagues shared at CDSS, the data system changes that CDE will need to make depend on the exact nature of the changes required by the agreement between the state and the Child Care Providers United union, and the same can be said as a question in the agenda around staffing.

So, for example, thinking about data systems, if the final structure requires data that the current system does not collect, it may be more efficient to create a new fiscal data system rather than adapting the one the state already has. Once CDE knows what changes to the current fiscal data system will be needed, based on the agreement with CCPU, the CDE will be able to share more information on timeline and resources needed.

And then we have clarifying questions regarding the State Preschool Program appropriation that we are working through with the Department of Finance. But adjustments made in the May Revise provide CDE with sufficient funds to administer the State Preschool Program as well as carry out the items associated with the current union agreement.

Our review is based on current estimates, so if there are increases in enrollment, it is possible that funding will be insufficient to cover the costs of the union agreement. However, we will note that there is a sore need for non-Proposition 98 funds to ensure preschool is more available in the mixed data delivery system. As this process moves forward, we are happy to provide technical assistance to the Legislature and the Administration. Thank you very much, and I'm happy to take any questions at the appropriate time.

Department of Finance, on preschool programs, any additional comments?

Hi. Hi, Sabrina Adams with the Department of Finance. I can provide an overview of the May Revision proposal for early education items. Starting off with the State Preschool Program, the May Revision includes adjustments to the State Preschool Program that reflect a right sizing of funding based on updated estimated costs and utilization. So, starting off with the state preschool program on the local educational agency side, the May Revision includes an overall decrease of 9.2 million Proposition 98 General Fund.

This reflects an increase of 64.5 million ongoing Proposition 98 General Fund, which can be considered as a technical baseline adjustment to support the requirements of the State Preschool Program, and this also reflects a decrease of 73.7 million one time Proposition 98 General Fund, which is due to revised caseload estimates of three year old children and children with exceptional needs.

The May Revision also includes provisional language that specifies that, within the State Preschool Program LEA budget, roughly 15.8 million Proposition 98 General Fund is available to reduce family fees. For non-LEA State Preschool Program funding, the May Revision adjusts the amount of one time savings scored at the Governor's Budget, down by 18.7% million non-Proposition 98 General Fund and this adjustment accounts for revised program estimates to administer the State Preschool Program.

The May Revision also includes provisional language which specifies that within the State Preschool Program non-LEA budget, roughly 14 million non-Proposition 98 General Fund is available to reduce family fees. Additionally, the May Revision includes a technical adjustment to decrease reimbursement authority for the Preschool Development Grant support by 1.71 million in 2024-25 and 1.729 million ongoing in 2025-26, which would leave 19,000 in reimbursement authority for the Preschool Development Grant in 2024-25, and these adjustments are needed to align reimbursement authority with the remaining contract amount.

Just to highlight federal fund adjustments in the early education area, for the Early Head Start Child Care Partnership grant, the May revision provides roughly 1.9 million early Head Start Child Care Partnership federal grant funds annually through 2028-29 to support the Administration of the grant and the May Revision provides roughly 3.5 million Early Head Start Child Care Partnership Grants grant funds annually through 2028-29 to support selected local partnering agencies that work to increase the quality of early childhood programs.

I will also cover early education BCP investments. There's only one BCP to cover, and it is a chaptered legislation BCP for AB 393. The May Revision provides 185,000 non-Proposition 98 General Fund, of which 182,000 is ongoing, and one position to support the workload, support new workload associated with the implementation of AB 393.

And lastly, I'll briefly cover some trailer bill changes that are proposed for the May Revision. For the California Universal Planning Grant Program, we propose an amendment to allow newly formed consortia of current grantees or individual counties who participated as a grantee in a former consortium to apply for renewal grants.

And for the California State Preschool Program, we propose language to clarify that 3 and 4 year old children without exceptional needs should be enrolled at the same priority. And another amendment is proposed to eliminate the requirement for California State Preschool Programs to reserve 7.5% and 10% of funded enrollment for students with exceptional needs in 2025-26 and 2026-27, respectively. That concludes the overview of early education proposals from May Revision, and I can answer any questions at the appropriate time.

Thank you very much. LAO.

Good morning. Sara Cortez, Legislative Analyst Office. We're continuing to review the preschool proposals. However, I wanted to comment on two things. Pausing the preschool inclusivity policy at 5% seems reasonable given the budget picture. While this wouldn't require state preschool providers to eventually have 10% of their students enrolled be students with disabilities, state preschool programs could continue to serve a higher number of students with disabilities, although there are some caveats around that. With regard to the augmentations to rightsize the State Preschool Program, we're continuing to review and receive information about this proposal.

I would highlight that, based on our April analysis, the state could lower the amount of Proposition 98 even further than the Administration proposes in the May Revision. Given our differences with the Administration regarding how much funding is needed to meet existing obligations, I'd like to reiterate a recommendation in our April analysis.

We recommend the Legislature remove the newly added language that allows CDE to provide temporary rate increases with any excess program funding. This would ensure that the Legislature determines how funding is used. Thank you, that concludes my remarks.

Thank you very much. Any additional discussion? Seeing none, we will move on to the next item then. Thank you so much.

Issue number two, all other DSS May revision proposals. And you may begin.

Thank you, Chair and Members, Kim Johnson, California Department of Social Services. I will follow beginning on page eight of your agenda, and we'll work to give you the caseload updates as well as the proposed May revision components as we go forward here.

So we will start with CalWORKs, a program supporting approximately 340,000 families across California, 665,000 children each month. And I want to say that there are components here. Please pause me at whatever point you'd like here in terms of understanding each component of what's being proposed.

Again, as I referenced, there is no reduction proposed in CalWORKs grants, in fact, an increase that I'll go over, but let me start with caseload. For 2023-24, current year, the May revision includes 6.3 billion total funds, which reflects an increase of $75 million total funds from Governor's Budget estimates.

This increase reflects restrictions restoring current year funding to the appropriation level for expanded subsidized employment and family stabilization, as well as increase in employment service expenditures partially offset by lower CalWORKs assistance expenditures. For budget year, for 24-25, the May revision includes 5.7 billion total funds, 2.6 of which is General Fund, which reflects a decrease of 440.5 million total funds from the Governor's Budget.

The decrease reflects reducing CalWORKs employment services, lowering CalWORKs assistance expenditures, and increases in the shared eligibility and Medi-Cal common cost shifts. For caseload for current year 23-24, the caseload is projected to be approximately 348,600, which is less than a 1% higher than the 2024 Governor's Budget estimates, but still reflects a year over year increase of 1.6%.

For 24-25, the CalWORKs caseload is projected to be around 354,800, which is a 0.2% higher than Governor's Budget, but still reflects a year over year increase of 1.8%.

The CalWORKs grant increase for May revision proposes 0.3% increase to CalWORKs maximum aid payment levels effective October 1 of 2024, based on the projection of available revenues with a child poverty and family support sub account. That cost is $10.5 million.

This is slightly lower than the 0.8% increase that we projected in Governor's Budget, and that's due to updated revenue projections. The increase will bring the non exempt maximum aid payment level from $1,171 per month to $1,175 per month for a family with an assistance unit of three in a high cost county.

The CalWORKs single allocation. Based on projected caseload, counties receive a fixed amount of funding annually for administering CalWORKs and providing employment services. This funding is provided to counties in a single allocation block grant, which allows fungibility across three components: eligibility, administration, employment services, and Cal-Learn intensive case management, which is for pregnant and parenting teens.

What we've already done to the single allocation in the early reversion, AB 106 reverted $336 million of unused CalWORK single allocation from the 22-23 fiscal year.

The early reversion will not have an impact on client supports and services. For what's maintained from the Governor's Budget in May revision related to the single allocation is that the 21-22 budget, the Legislature provided an ongoing base funding increase of $40.8 million of General Fund for eligibility administration.

The Governor's Budget proposed a reversion of those dollars, resulting in a reduction of 48.8, and that is continued again in the May revision. We have revisited the CalWORKs administrative methodology, and this was our third year, essentially to revisit that methodology again.

Our triennial assessment pursuant to current law. The Department engaged with the County Welfare Directors Association and counties. Based on these discussions, we determined that the eligibility worker rate and funding for application, independent of caseload, were the areas that could be considered for reassessment in the methodology.

We provided this analysis just recently, this week, yesterday, as a matter of fact, to the Legislature. Based on a survey of 56 of the 58 counties, the fully loaded eligibility worker costs updating the eligibility worker rate would require $160.3 million in funding for the eligibility administration component of the single or 21.4% increase, and then the updating the methodology for funding applications would result in an increase of 48.8 million, or 6.7% increase.

The Governor's may revision does not include additional funding to address and update that methodology. The May revision includes a total of $1.7 billion for the single allocation in 23-24. That's no change from Governor's Budget.

The May revision includes 1.3 billion for the single allocation in 24-25 representing a decrease of $162 million total funds compared to the Governor's Budget. And I'm going to go through why again here. So the CalWORKs employment services proposed reduction in the May revision is one time, that is a one time reduction of $272 million in General Fund.

And overall, the budget reflects a net decrease in CalWORKs employment services of 143.4 million, as this reduction is partially offset by an increase of 128.6 million due to a higher employment services caseload than previously projected.

Again, you know, counties use the employment services component of the single allocation to administer the Welfare-to-Work Program, providing an array of services and supports to help families overcome barriers to employment, increasing resiliency, and achieving economic mobility.

Although the employment services funding has historically been underspent, counties have historically utilized some of the available employment services funding to supplement the amount of funding for program administration. Again, I mentioned that fungibility between those items in the single allocation. So therefore this reduction may impact counties' ability to offer employment services and their overall administration of CalWORKs.

In terms of expenditure history for CalWORKs employment services, just to give you for the employment services component, about 49% of employment services was funded in 21-22 and 22-23 about 51%. And in current year, obviously still to be determined, about 51% is projected.

In terms of the total single allocation- so that was just the employment services component- expenditures have ranged from between 71 to 88% over the last few years. I'm going to move from single allocation in CalWORKs to the services proposals, and I don't know if you'd like me to pause on single or keep moving on services.

Keep going. It'll be helpful if you go by with the agenda, though, in terms of the various items starting on page eight. The CalWORKs mental health. So have you covered the CalWORKs mental health and substance abuse services?

That's where we are now.

Okay. So we just kind of got confused because that was the first bullet, but you went into the single allocation first, so we were just trying to make sure we can follow along with you.

Got it, got it. So that was all of the single allocation I just covered. I will move to services now and again, the Governor's Budget, as you heard me speak to, maintains the proposals for 24-25 in terms of reductions to family stabilization and expanded subsidized employment.

But again, current year funds are restored. So I will move to mental health and substance abuse proposals. This is a proposed elimination of these funds. The May revision proposes to reduce funding for CalWORKs mental health and substance abuse services by 126.6 million in 24 and 25.

And ongoing barrier removal services, including those provided through CalWORKS mental health and substance abuse, are among the welfare to work activities that CalWORKS participants can engage in. In 22-23, a monthly average of 5,628 individuals were receiving mental health and substance abuse services through CalWORKs. This includes 5,098 receiving mental health and 530 receiving substance abuse services.

As a result of this proposed reduction, counties may consider using the employment services component of the single allocation. But you did just hear me mention the reductions proposed in that space to provide non medical mental health and substance use services as well.

I will note that it is the non medical components of this program that is intended to be supported, although I will also acknowledge that we have changed a lot together, the Administration and Legislature, in terms of the overall array of services provided through Department of Health Care Services in this space.

Home visiting. The CalWORKs Home Visiting Program was established in 2018 as a voluntary program for the purpose of supporting positive health development and wellbeing outcomes for pregnant and parenting people, and the May revision proposes total funding of 58 million for the CalWORKs Home Visiting Program.

This reflects a reduction of 47.1 million in 24 and 25 and ongoing to adjust funding to utilization to address the shortfall. CalWORKs Home Visiting is implemented by 41 counties and averages 3,400 families served per month, and that's based on 2023 data. The proposed reduction was based on a point in time utilization rate.

That said, because it's our understanding that counties have since increased the number of families served in the current year, actual utilization may be higher and some families currently receiving services may need to be discontinued from the program if this proposal is enacted.

In terms of expenditure history, 21-22 funding for Home Visiting was expended at 66%, 22-23 at 59%, and current years to be determined, but approximately 39% to date.

And then in terms of the proposal for the Work Incentive Nutritional Supplement, this is a supplemental $10 per month food benefit identified as form of TANF assistance to Calfresh households not receiving CalWORKs that are meeting TANF work participation requirements.

The May revision proposes to eliminate this supplement, resulting in an anticipated reduction of $25 million in 25-26 and ongoing. It is a proposed elimination. WINS has historically supported our ability as a state to meet the federal All-Families Work Participation Rate, thus avoiding federal penalties.

Because the recent federal Fiscal Responsibility Act provides enough caseload reduction credit for the state to meet the All-Families Work Participation Rate, WINS is no longer needed for this purpose. Elimination again of WINS, that $10 benefit, would result in impacting approximately 100,000 Calfresh households. And I will pause.

So we're going to pause there and so that we give an opportunity to for the Department of Finance and LAO to discuss CalWORKs.

Emily Marshall, Department of Finance. Nothing further to add, but happy to answer any of your questions.

Sonia Schrager Russo with the Legislative Analyst Office. Generally speaking, our comments today reflect our preliminary assessment of the May revision proposals, and as we continue to receive additional information from the Administration in the coming days, we will plan to update our overall assessment as well as provide to your staff issue-specific analyses that will include assessments of the proposed reductions as well as caseload assumptions in the May revision.

So that will be in the coming days as appropriate. With that in mind, our comments today mainly focus on high level key questions that we may have for the Administration about these proposals and that might be of interest to the Legislature as you consider these proposals.

So, turning first to, and I can make sure I go in the order we have here. Turning first to the mental health and substance abuse services proposed reduction, as mentioned, this is an elimination of this service offering through CalWORKs.

So our questions for the Administration that we intend to engage on surrounding this proposed reduction center around the potential impacts that this might have on current participants within this sub program in CalWORKs, as well as future potential recipients if the program were to continue.

We also have questions surrounding the potential impact that this reduction might have on the state's application for the federal TANF work outcomes pilot that we've discussed in previous hearings, which focuses on family wellbeing alongside work outcomes. So we're hoping to raise questions with the Administration surrounding that as well.

Turning next to the proposed single allocation reductions, when we think about this proposed reduction alongside the originally proposed single allocation reductions from the January budget, which, as has been mentioned, have been carried forward into the May revision, we do have questions for the Administration around how these reductions might impact local service delivery, both in terms of employment services, which is where this proposed reduction sits specifically.

But as the Director mentioned, in terms of Administration and eligibility activities as well, given the fungible nature of the single allocation.

And given the reports that we've heard in previous hearings from counties around the usage of employment services funds to cover eligibility and administration activities, given the rising costs that they're seeing at the county level when it comes to the required eligibility activities that they complete.

And then finally, in terms of the Home Visiting Program and WINS proposals, again on the Home Visiting front, we have similar questions around the potential impacts in terms of who are the recipients that will be impacted, how many recipients will be impacted.

As again, the Director mentioned, it sounds as if counties are seeing increased usage of the Home Visiting Program as of late, and so it does raise questions for us for the Administration around if this will result in a decrease in services, despite the fact that this is not a total elimination of funding for the Home Visiting Program.

And then turning to the WINS proposal, this is something that we've wrote more about back in January or February, which we'd be happy to share with your staff again if helpful.

But this time does seem to align with some of our recommendations for the Legislature to begin thinking about what it would like to do with the WINS program going forward, given what Director Johnson mentioned about the federal changes that will impact the efficacy of the WINS program in terms of meeting the state's WPR. But we do have questions for the Administration when it comes to the long term impacts on the state's ability to meet the WPR if WINS were eliminated.

Thank you very much. I think I'll just start off with a few statements. I believe it's no surprise that there are some key programs within CalWORKs that I remain opposed to.

And I look forward to working with the Administration to preserve the CalWORKs mental health and substance abuse services we believe is key to keeping people stable and to help them to continue to move out of a state of crisis.

Although I do have a concern, or this Committee has a concern about the CalWORKs single allocation eliminating both of them and would like to make sure that at least one of those are preserved. Again, I know, LAO, you still have many questions in terms of how many people will be impacted.

How could they be impacted on those things? This Committee shares those things. Again, tough decisions have to be made, but decisions should always be made based upon the outcomes of those potential cuts. So making cuts without understanding impact is just simply not acceptable.

And so we would love to, we urge the Administration to ensure that those questions are answered so that we can maintain a just process to ensure that we really evaluate each and every item so that we make sure that we understand the impacts that it would cause. I have a question in regards to the Home Visiting Program. How many families will lose home visiting services if the proposal is adopted?

Thank you for the question, Chair. As I referenced, our 2023 data shows that we are serving around 3400 families per month. What we don't know as of today is the increase that we've seen in uptake and utilization. So the estimates were originally proposed based on point in time data that was at utilization rates.

And we believe that since there's been an increase since that point in time data, there could be impact of having to disenroll or not newly enroll families in current year. And so again, we don't have more specifics in that based on the data that we have to date. But again, giving you a sense of the magnitude of how many families are enrolled per month today.

And how would we decide which families will no longer be able to receive those, the home visiting services, what would be that criteria?

I think to your point, operational considerations of how this would roll forward are certainly things that we want to think through. And again, I think it's going to be dependent upon total caseload at the most current information we have. We have information in arrears at the state level. So the county claims come in in arrears.

That's why we can't give you the number today or giving you a number from a prior time period. So we would be potentially looking at, obviously always wanting to do least harm.

So if we were able to maintain existing families and carry through and not newly enroll, that would be likely our first priority of preference. If we actually had to reduce either time on participating in the program or disenroll families, that's another consideration we're going to have to have additional conversation about should that go forward.

Certainly, home visiting programs, community health worker programs, those programs that utilize those models. I mean, in terms of the academic research shows that it has promising results. I'm wondering what type of results have we been able to see within our data that validates the important benefits of this program?

Yes. Appreciate the question, chair. And we are seeing really phenomenal outcomes in those who have been engaging. We have several different models of home visiting being implemented through the CalWORKs Home Visiting Program, Healthy Families America, Nurse Family Partnership, and several others.

And we are seeing with those referrals the connection to services being great, whether that's a connection to food resources or expungement resources in any kind, based on the needs of the family being served. We've actually also seen a reduction in engagement in child welfare for those families who have been participating in home visiting.

So our preliminary evaluation, we're glad to make sure the Committee has the full report of our latest evaluation efforts, is showing absolute positive outcomes for those who are voluntarily participating in home visiting.

Thank you very much. Mister Lee.

Thank you, Mister Chair. And I want to thank, of course, the Director for heeding my advice about whether some program is eliminated or not, but also elaborating on how many people are actually affected by these reductions or eliminations. First, I just had a couple questions about CalWORKs, the mental health and substance abuse services issue.

Again, how many people are being served currently by it and how many people would lose service? Well, this program is being limited. So how many people are currently being served by it?

5,628.

5,628. Okay, thank you. And even though, well, I'll just put it this way. So you had talked about how this- actually, let me rephrase my two questions.

First of all, can you describe a little about what this program does right now and then you described how the counties you imagine can offset these services, because you also described. So first question is, what are the services and programs that are funded by this now?

And secondly, you described the counties can offset with other funding for non medical mental health. And I'm not entirely sure what non medical mental health is. So if you can talk about those two things.

Sure, sure. So again, these are non medical mental health and substance use services, depending on the needs of the individual. And we have, between July 21 and 22, to give you an example, we do an online appraisal for all families participating in CalWORKs to assess needs.

Of 110,000 appraisals that were completed, 37,637 mental health service recommendations were made, 5,101 substance abuse recommendations. So we're having an appraisal that's actually identifying what services might be most beneficial to the families that are participating. These are intended to be non medical. So that's the difference. Like, why aren't we able to just transfer and refer people to healthcare services in this space?

These are intended to be non medical. So to the extent that anything we are currently, currently funding and those families are currently receiving would be eligible through the Medi-Cal window, we certainly want to maximize that doorway. I can't differentiate that from those that would not.

So the potential, again, given kind of the guidance that we have on this funding, would be that all of the individuals currently receiving services would be impacted with this proposal.

So again, could you elaborate more specifically what that means, though, when you talk about the non medical? I mean, of course, I understand the referral aspect, but what are the actual services that these people are going to be losing out on? What are the material services?

Jennifer Troia on behalf of the Department. The counties have enormous flexibility in designing what services they're going to utilize. So in many instances they may provide some services themselves. In others they contract with community based organizations.

So there may be community based supports that are provided in support groups or in other coaching and resources, but it varies by county, and we don't collect detailed information from every county about how they're utilizing these dollars.

We do know that the vast majority of them are being utilized in the category of mental health and a much smaller proportion are being utilized in the category of substance abuse.

But of course, if we focus even on the substance abuse, there's type of medically assisted substance abuse, meaning they are receiving some types of medication, some types of other substances. They help them come down from anything in terms of addictions and those type of things.

I'm sure that's more in the medical side of things as opposed to support groups, AA kind of meetings, sit down therapy type things. Am I correct in that? Okay. I think we are okay. We're moving on to Calfresh.

So I'll start the same way. Just giving a caseload and overall funding picture and then talk about the May revision proposals. The federal Calfresh benefits budget is approximately $13 billion in 23-24 and 12.3 billion in 24-25, which are outside of the CDSS budget provided directly to recipients.

The year over year decrease in estimated federal benefit reflects the end of the pandemic EBT supports. We also have federal SUN Bucks. This is the summer EBT new program reflected in our budget and include 226 million in 23-24 and $1 billion in 24-25.

The year over year increase reflects the timing of the issuance across two summers. For 23-24 dollars, the May revision includes 3.2 billion total Fund, 1 billion of which is General Fund in 23-24 Calfresh Administration, including P-EBT and SUN Buck administration and transaction costs.

This rate represents an increase of 2.1 million total Fund and a decrease of 3.8 million General Fund from the Governor's Budget estimates. The increase in total funds reflect updates to the Nutrition Education state plan and The Emergency Food Assistance Program, while the decrease in General Fund reflects updated SUN Bucks issuance timelines for the summer.

For 24-25, the May revision includes 3 billion total Fund, 1 billion of which is General Fund for Calfresh administration, including SUN Bucks.

This reflects a decrease of 31.7 million, 4 million of which is General Fund from the Governor's Budget, primarily due to lower intake, expedited service, and other administrative costs, partially offset by an increase in SUN Bucks administration and transaction costs.

For caseload, the average monthly Calfresh caseload is projected to be 3.06 million in 23-24 and 3.9 million in 24-25. The 23-24 average monthly Calfresh caseload was expected to grow 3.8% in the Governor's Budget and is now expected to grow at 4.1%, a little bit higher in May revision.

The 24-25 average monthly Calfresh caseload was expected to grow 1% in the Governor's Budget is now expected to grow 0.9%, just under 1% in the May revision. Just very quickly, for the California Food Assistance Program, or CFAP, caseload for 23-24.

The May revision includes 130.8 million General Fund in 23-24 for CFAP, which reflects an increase of 11.1 million General Fund from the Governor's Budget. 24-25 May revision also includes 140.2 million in 24-25 for CFAP, which represents an increase of 4.9 million from the Governor's Budget estimates.

This increase reflects faster caseload growth in 23-24 and higher monthly projected costs in 24-25. The average monthly CFAP caseload is projected to be 54,658 in 23-24. The average monthly CFAP caseload for 24-25 is projected to be 58,838.

The average monthly CFAP caseload is expected to grow by 19.1% in 23-24 and by 10.6% in the Governor's Budget. Those are now updated to grow 26.4% in 23-24 and by 7.6% in 24-25.

The two large May revision proposals that I want to reference. Minimum Nutrition Benefit Pilot for Calfresh, the May revision proposes to eliminate this program to assist in closing the budget shortfall, resulting in a reduction of $15 million General Fund savings in 24-25. This proposal includes Budget Bill Language.

The pilot has not yet been implemented, so there's no immediate impact in that space other than the benefits that would have ever been provided are no longer going to be done.

So for the CFAP expansion, the May revision proposes to delay the implementation of the CFAP expansion expansion to all Californians aged 55 and older, regardless of immigration status, by two years.

This proposal extends implementation from October 1 of 2025 to October 1 of 2027 and results in a reduction of 17.7 million General Fund for automation in 24-25 and 5.5 million General Fund for outreach in 24-25. Again, would say no immediate loss as these individuals are not currently eligible other than they would have otherwise received them sooner.

Prior estimates indicate that 75,000 people would have received CFAP during the first year of the expansion. Anything you'd add to that? Okay, so I'll pause there for additions.

So we'll move on to Department of Finance if they have comments.

Emily Marshall, Department of Finance. No additional comment, but happy to answer any of your questions.

All right, on to LAO then.

Sonia Shrager Russo with the Legislative Analyst Office. As mentioned, our office will be assessing the Administration's caseload assumptions, and we'll provide updates in the coming days on that topic. As it relates to the two proposals that are bulleted out in the agenda.

At initial review of these proposals, our understanding is that they do seem to align with our overall recommendations that were made back in January or following the January budget around recommending that the Legislature consider pulling back funds that are for programs that have not yet been implemented.

And both of these do seem to, again, at first review, meet that criteria. So given the budget situation and the need for reductions across the budget, we recommend that the Legislature consider these in their long list of priorities across human services.

Thank you very much. So we'll move back to discussion of the Committee, which is just me at the moment, but for the Director, I just wanted to reiterate, comment, if you could follow along with the structure of our agenda, just for the sake of clarity with everyone on board.

I'll just start by saying some comments is, of course, the Legislature is quite taken aback, especially this body, when we're seeing a lot of cuts and reductions to Calfresh, when we're literally talking about providing food to poor Californians.

You know, a third of Californians live in poverty. And I personally, of course, champion to expand the very excellent program you had for the Calfresh Fresh Produce Program, to get fresh produce that works so well and seamlessly with our stores, to get people to have fresh fruits and vegetables, which was only 30 million to extend it.

Of course, the money dried out. So it's quite taking back our Members that to balance the budget, we're taking so many steep cuts in this program when especially people are relying on the basic essential food in this regard. So I know you went through a lot of the items, but I want to just come on that aspect.

I don't think I have a lot of questions in it, but to say that I think it gives a lot of heartburn to Members of this Legislature that we are balancing it this way into this approach, I don't know, Mr. Chair, if you have any other comments before I return the gavel back to you, about Calfresh?

Okay, are we ready to move on to the next item here? Foster care and child welfare.

Sure. And I'll start with, again, caseload information and overview of funding. The May Revision includes $9.5 billion, 960.8 million General Fund, and 23-24 for Child Welfare Services, which reflects an increase of 193.9 million from the estimates included in the Governor's Budget.

This increase is due to the restoration of the Child Welfare Stabilization Fund for Los Angeles County that was $100 million General Fund, slightly offset by a decrease in CalSAWS' interface costs associated with an updated automation schedule. The caseload for 23-24 is projected to be approximately 113,000.

The May revision includes 9.7 billion in 24-25 which reflects an increase of $246.9 million, 37 million of which is General Fund from the 24-25 Governor's Budget estimates. The increase is due to growth in expenditures associated with the home-based family care rate and expenditures associated with the realigned adoption assistance program.

The caseload for 24-25 is projected to be approximately 112,000. And in terms of proposed reductions in the May Revision, would note that the Budget Act of 2022 authorized $50 million in General Fund to child welfare agencies to cover cost of workload associated of resource family approval activities.

These activities may include background checks, clearances, home health and safety assessments, permanency assessments, pre and post-approval training, written reports and more. The May Revision proposes a reduction of that 50 million, essentially an elimination of those dollars in 24 and 25 and ongoing.

The reduction would likely result in higher caseloads for county staff who approve caregivers and therefore in delays in approvals of caregivers and permanency for children. The reduction in funding would likely increase timeliness to approval for resource families.

Delay in approval for relatives with placement prior to approval means that only the basic rate is available through emergency caregiver funding, even if the child is eligible for higher level of care rates. Delays in approval may also delay permanency for children unable to return home.

The reduction in funding would limit post-approval support services available to resource families and county resource family approval staff would have increased caseloads as referenced. In terms of the Emergency Child Care Bridge Program, this program aims to facilitate the immediate placement of children within the foster care system into a stable childcare and development setting by helping relatives, parenting youth and others obtain childcare services.

It provides time-limited vouchers for childcare and childcare navigator services for families to assist in accessing childcare. There's also a trauma-informed training and coaching component for the childcare and development programs and workforce.

The May Revision proposes to reduce the Emergency Child Care Bridge Program by 34.8 million General Fund to more closely align with program expenditures and assist in addressing the shortfall. This represents 40% of total state funds, and expenditures in the emergency bridge program have ranged from 41% to 68% over the last few years.

We can give you specifics on those if you'd like. And again, this is a reduction, not an elimination, so I will pause there for questions.

The Department of Finance.

Marlon Davis Department of Finance nothing further to add. Happy to answer any questions.

Have I seen you before?

You have seen me before.

I have. You're usually over there. Okay. I don't like people just popping up around here, you know. LAO.

Angela Short with the Legislative Analyst's Office. Regarding the proposed elimination of the 50 million for the caregiver approval funding which has been provided to counties for the past couple years, some preliminary questions we have, which Director Johnson essentially already spoke to, are to what extent will eliminating this funding result in additional backlogs and delays in terms of counties ability to process applications for resource families?

According to the latest data we've seen, which I believe is from June 2023, the median and average processing times still are over 100 days. This is above the target of 90 days. We will continue working with the Department to try to better understand and quantify to what extent will reducing funding results in further or longer processing times.

And then regarding Emergency Child Care Bridge, I'll pass that over to my colleague for a few comments.

Jackie Barocio, LAO. As was mentioned by the Department, these reductions would be split between voucher and training funds. We would just highlight that they are ongoing reductions, and the reduction amounts seem to mirror augmentations that the Legislature approved in 22-23.

Our understanding, at least in the voucher reductions, those do tend to align with how much funds have gone unspent in recent years that have ranged from 13 million to 40 million.

Our understanding is the reason why voucher costs may have come in below budgeted levels is because expansions in the other childcare programs were enough to kind of absorb the capacity or the demand for childcare with these families. So, one thing that we would flag for the Legislature is, right, while this action may be right-sizing based off of past trends, to the extent that this reduction coupled then with the delay in childcare slot expansions and the other programs, there's a potential that demand for Emergency Child Care Bridge may be greater in future years.

We have no insights on how the training reductions compare to training expenditures in past years and we've asked for that backup, and we'll follow up with the Legislature if we have any concerns. Thank you.

Thank you very much. Administration, particularly the caregiver approvals, I've expressed my need to make sure that we're doing right by the children who are in our care. And how do you gauge the impact of this cut in terms of being able to make process the foster caregiver applications?

Do you anticipate any major issues and if you already have anticipated understanding this is just one of those tough decisions you have to make, but what are your, what do you anticipate being impacts to this?

Yes. Thank you, Chair, for the question. We would anticipate higher caseloads for county staff which also within enforced impact timeliness issues in terms of the approval process. That's where we would see the primary impact. There are realigned resources here at the county level, but again, based on this additional augmentation that we provided, that's what we would anticipate.

Okay. Additional questions on this item. Okay, we will move on to in home supportive services.

For in-home supportive services, again, I'll start with caseload. The May Revision includes 22.7 billion, 8 billion of which is General Fund in 23-24 for IHSS which is an increase of 330.6 million in total funds, but a decrease of 29.2 million General Fund from the Governor's Budget.

The increase in total funds is due to increase in hours per case projected caseload and cost per hour. The caseload for 23-24 is projected to be approximately 665,000 recipients.

The May Revision includes $25 billion, 9 billion of which is General Fund in 2425 which reflects a net increase of 746.4 million, 15.5 million of which is General Fund from the 24-25 Governor's Budget.

This net increase is due to the growth in the hours per case projected caseload cost per hour offset by savings associated with the elimination of the IHSS Backup Provider System and the IHSS benefit for undocumented immigrants, which I'll speak to in just a second. The caseload for 24-25 is projected to be approximately 700,000 recipients.

This represents caseload growth of 5.9% between current year and budget year. Elimination of in-home supportive services for undocumented immigrants affected by the full-scope medical expansions.

This elimination for IHSS for all undocumented recipients would affect estimates for the caseload impact of Senate Bill 705, 18 and under, and undocumented recipients aged 19 to 25, 26 to 49, and 50 and older.

The elimination would result in a reduction of $94.7 million in workload adjustment of 304.8 million General Fund in 24-25 and ongoing to assist in closing the projected shortfall. For the elimination of the IHSS Permanent Provider Backup System, in October 1 of 2022, the IHSS Backup Provider System was established to assist recipients with finding a provider when an urgent or immediate need for IHSS services arises and their regular provider is not available, or when an IHSS recipient is transitioning from out of home care to home-based care and they do not yet have a provider.

Each eligible recipient is authorized to receive up to 80 hours and in certain instances, up to 160 hours of backup provider services each year. Under the provisions of this system, providers who provide the backup services receive a wage differential of an additional $2 per hour over the current county wage rate.

The May Revision proposes the elimination of the backup provider system, resulting in a reduction of $11.6 million General Fund in 24-25 and ongoing. Would note in terms of utilization that we recognize the utilization rate is low, with an average of 110 IHSS providers providing backup services each month in the first four months of this year.

So, January 105, February 117, March 114, and April 105. It's assumed that really low utilization rate that since approximately 70% of providers care for recipients who are family members, or close friends, the vast majority of such recipients are basically creating their own backup provider arrangements within other circumstances if their provider is ill.

Chief Deputy Director Ramsey anything else you'd add on any of either of those proposals?

No, but happy to answer any questions.

Department of Finance.

Idalys Perez, Department of Finance. Nothing further to add.

LAO.

Juwan Trotter, Legislative Analyst's Office. So, for IHSS overall, we know that during the evaluation of the January budget proposal, we did note that for that there were some areas we believed the budget was not in line with utilization.

So, in regards to the May proposal, we will continue to monitor caseloads and utilization rates and provide updates as necessary. Jumping to the elimination of the IHSS for undocumented populations of all age groups first, we would note that the Administration has significantly reduced their estimate of what it would cost to provide IHSS to undocumented populations.

The estimated cost was hundreds of millions of dollars in January, and that dropped down to below $100 million in the May Revise. We are and so we are taking a closer look at these estimates. Going from that, our primary question in regards to this proposal revolves around how this proposal will be operationalized.

So, will services ramp down for existing recipients, or will they end more suddenly? Are there any other resources that the affected populations are eligible to receive or utilize that may provide approximate services? And at a higher level, we have questions around implications for eliminating one Medi-Cal benefit for a specific group of recipients.

For example, is this done anywhere else in Medi-Cal? How was it decided that the IHSS benefit is a component of the program that would be eliminated for the undocumented populations and were other benefit eliminations considered? Moving on to the elimination of the Permanent Backup Provider System.

So, during evaluation of the Governor's January proposal, we noted that given the lower-than-anticipated utilization rates, that there may be room to create savings by rightsizing the program, as was mentioned, to better reflect actual utilization.

The Department does make a downward adjustment to the cost of program, as mentioned in the May Revise before proposing to eliminate the program completely. But with that, we are looking at the updated estimates of the program cost to see if further reductions could be made to achieve significant, significant cost savings without fully eliminating the program.

Thank you very much. Certainly, in-home supportive services is critical to our population. I'm wondering, is it cheaper to keep folks in in-home supportive services than for them to go into a nursing home?

Claire Ramsey for the Department, I'll start. We have not costed out the differential and generally, our budgets are separate from the Department of Healthcare Services so that we don't do a apples-to-apples comparison. But I'll turn to Department of Finance if they have anything to add there.

Kia Cha, Department of Finance. Would just concur that at this time we don't have any estimates, but we'll continue to work with the Department on that.

Yeah, I'm just wondering if by cutting this program for undocumented, will we end up paying for it in a more costly way down the road. I mean, obviously this is the human services side and not the health side, but certainly it's the same person and it's the same budget.

So, this Committee's going to take a deeper look at this, looking at from a more holistic point of view, because certainly we do not agree with the total elimination of in-home supportive services for the undocumented. We don't want to see this program zeroed out.

We want to make sure that we preserve as much as we can, but also understanding it is quite a hefty budget line item, too. But certainly, we need to make sure that we're doing that, and we also want to make sure that we preserve the backup provider system also.

What I do want to do is if I would like to get at some point, I would like to get the Department of Finance and LAO to kind of do a cost comparison in regards to my question in regards to nursing home versus in-home supportive services.

That would be helpful as we discuss it as a full Budget Committee. I want to make sure that we bring that to light as well. Additional? Yep, Mister Lee.

Thank you, Mister Chair. Yeah, I just want to echo and second your comments about how this is quite concerning to be eliminating IHSS for our undocumented community. I mean, we have, of course, the Administration, the Governor and the legislation find great strides to universalize all of our services, especially when it comes to healthcare.

And just like our chair said, these are the same folks who still need care, and the alternatives out there are maybe a care home or nothing.

Out of chairing the Human Services Policy Committee, we also made strides to expand the IHSS compensation workforce to include family members of undocumented folks as well, owing that this population needs to have someone to care for. So, we remain very concerned about the complete elimination. But I did want to ask the question, too.

One, how many fam or how many people would lose service if this was eliminated today or eliminated in the proposal? And secondly, is how is that elimination imagined to happen? Is it phase-in? Sudden? If the Department or DOF could comment on those two?

Thank you, Assembly Member. 2968 individuals are the number of individuals that would be impacted. If the proposal were to move forward, we'd need to draft policy guidance, issue notices of action, get data from the healthcare services, ensure there was no other qualified populations included, make some system changes, etcetera.

So, there's going to be several steps that we need to take in terms of time. We don't have a specific exact timeframe by which we could accomplish that, but we could follow up with the Committee with that.

Right. And I also imagine is if we were to adopt this proposal in, you know, very soon, how, how quickly or suddenly would people lose service? Even if you have to go through that, would they say next year or this year? How soon could they expect losing service?

I would, we would bet our best guess estimate would be it would be this year.

This calendar year.

Yes.

Okay, thank you.

So just want to reiterate, LAO, if you help us with the cost comparison, I believe that this has been done before, but it's been quite some time since we've had an updated report on the cost comparison. So, look forward to seeing that information. Again, another key priority, a core priority for not just this Committee, but our colleagues.

We want to prevent causing instability, and there is no doubt that this could be one of those things that can cause instability. So, we want to continue to work with Administration to find ways that we limit that as much as possible. Seeing no other comments, I will let's move on to Adult Protective Services.

Thank you, Chair and Members. For Adult Protective Services, caseloads have grown throughout the expansion of Adult Protective Services. Overall growth can be seen across all of the data points tracked from January of 2019 to January of 2023. The total APS cases per month have increased from 36,815 to 44,199, which makes a 20% increase during that timeframe.

In terms of the May Revision, again, we'll note that the Budget Act of 2021 made the statutory changes to the APS program to lower APS eligibility age for elder adults from 65 to 60 years old and adjusted the eligibility age for dependent adults ages 18 to 59 and expanded the definition of self-neglect to include financial mismanagement and housing insecurity.

The My Revision proposes a decrease in funding for the Adult Protective Services expansion. The decrease in funding for APS expansion would result in a reduction of $40 million General Fund in 24-25 and ongoing. The impact largely impacts the counties and their ability to serve the expanded populations.

Counties have indicated to us in some additional feedback that they're likely to experience some potential layoffs, and then again would note that Adult Protective Services must, the counties must take a report for all calls within the 24-hour hotline and within very narrow exceptions.

All reports must include an in person visit, so it must investigate immediately for all cases of imminent danger as soon as possible, but no longer than 10 days of all non-imminent cases. For Adult Protective Services training, would note that this particular proposal has for the May Revision proposes the elimination of Adult Protective Services contract for training curriculum.

The elimination of the APS contract would result in a reduction of 4.9 million General Fund in 24-25 and ongoing. To assist in closing the shortfall, the state receives matching funds for APS training. So, the total budget for APS training statewide would revert to $176,000 per year.

Again, in terms of impact there, we would expect that obviously, it's a reduction in training available. This is a statewide availability, so we can't speak to what counties might be able to still provide on their own, but there's no alternative proposed in terms of that access that exists today. With that, I'll take any questions.

Department of Finance.

Idalys Perez, Department of Finance. Nothing further to add.

LAO.

Juwan Trotter, Legislative Analyst Office. So, for the AP's expansion reduction, we will note that it is our understanding that the counties have historically fully spent their annual APS allocations and thus any cuts will likely result in real reductions in services.

Further, we will note that while the APS expansion lowered the eligibility age for APS from 65 to 60, it is our understanding that the reduction in funding has potentially impacted the availability of services for all eligible age groups, not just the expansion age group.

And then for the elimination of the APS training, it's our understanding that because the funding of APS training has historically been a state responsibilities, counties may not have an extensive training infrastructure to fall back on should this funding elimination proposal be approved.

Some key questions we do have around this is around whether the training will that's been done in the past will leave the counties with any resources or how many resources to continue some level of training moving forward.

Administration do you concur with LAO that these reductions could possibly impact those older adults outside of the expansion age group?

Claire Ramsey for the Department. Our understanding is that the counties do not Bill the dollars. It all goes into a single pot. So, the expansion dollars are not separated from their larger APS budget. So, that's potentially an impact because they don't differentiate by age when they handle the cases, they just handle the cases that come in.

Okay, Department of Finance, you have anything else to add to that?

Idalys Perez, Department of Finance. Nothing further to add.

I'm just wondering how, number one, does do all the counties fully utilize all the funds that they receive?

Yes. Yes.

Okay, LAO, looking forward to you. Once you get some answers to your questions, please make sure that we get the answers to those. That'll be great so we can fully understand this item. Okay, anything? All right, we'll move on to housing and homeless programs.

So, as you'll recall, on the Governor's Budget, we had proposals to delay and defer some of the three of our housing programs that we have the opportunity to administer, and those are now proposed reversions of dollars. So, I will go through each of them individually.

Home Safe, just building on the APS conversation, is aiming to prevent and address homelessness of those in APS, in individuals who are served through a tribal social service agency who appear APS eligible. May Revsion proposes the reversion of funding from the Budget Act of 2022 for the Home Safe program at $65 million General Fund.

And then the Home Safe program would be sunsetting June 30th of 2025. It was a one-time appropriation over multiple years, so the program would be sunset June 30 of 2025.

For Bringing Families Home, this is a program that's focused on assisting families in the child welfare system who are experiencing or at risk of homelessness with the goal of increasing family reunification and avoiding foster care placement. The May Revision proposes the reversion of funding from, again, the Budget Act of 2022 for Bringing Families Home. That's $80 million General Fund.

The Bringing Families Home was also a one-time multi-year appropriation, so this program would sunset in June 30th of 2025.

And finally, the Housing and Disability Advocacy Program, which is focused on assisting individuals who are experiencing are at risk of homelessness who are likely eligible for disability benefits by providing case management, advocacy, housing supports and other services.

The May Revision proposes the reversion of funding from the 2022 Budget Act at 25, excuse me, at $50 million General Fund. This program is ongoing and has an ongoing appropriation of $25 million that would be unaffected with the May Revision proposal. With that, glad to answer questions.

Department of Finance.

Nothing further to add.

LAO.

Angela Short, with the LAO. At the time of the Governor's Budget, when these programs were proposed for delay rather than reduction, our understanding from the Administration was that the amounts proposed for delay were placeholders because they were intended to reflect the amounts beyond what counties would need for their current year and budget year.

And we had understood that we should anticipate there would be some erosion in those amounts because counties are continuing to implement the programs today. So, one outstanding question we have at this point is, are those savings actually possible, or have the amounts actually eroded?

In other words, is the savings scored actually going to amount in that amount of savings? And then additionally, a question we had asked at the time of the Governor's Budget was related to different spending trends across counties.

Again, our understanding is that certain counties may be fully extending their annual allocations for these programs, in which case those counties may actually need to sunset their programs earlier if they now run out of funding earlier based on the proposed reduction. So those are issues we'll be continuing to work with the Administration to understand. Thank you.

Thank you very much. I know, I'm very concerned about the, particularly the Home Safe program. Again, when I think about, you know, the growing number of seniors who are falling into homelessness, I'm wondering if our seniors will be able to withstand the impact of both the Adult Protective Services reduction as well as the Home Safe reductions.

Could you kind of, what are your thoughts about that? What else would seniors be able to rely on to help prevent them to be out of state of homelessness? Because obviously SSI, SSP doesn't cut it. We all know that. What's left for seniors?

Again, just noting to your point, right? The addition of the housing population specifically program was based on what we were seeing. The need was so we would, we can appreciate the point that you're raising, Chair, in terms of the additional vulnerability that that might create for the population with the, with the expiration of the funding.

And as we've spoken to the Committee in the past, the program is very successful, seeing six months post-exit, 85%, retaining housing and support. So, we would say it's going to be dependent upon local county resources, then, in terms of what would be available to this particular population that would be impacted.

And that's particular to the Home Safe program, correct? Okay.

That's right. That's right. So, obviously, we have had other strides and gains overarchingly with the Master Plan on Aging and many initiatives that we've had in that space. But again, this was a very specific program targeting the population of Adult Protective Services, so it would not have the same capacity to serve as it does today.

How much are we talking about in terms of unexpended amounts in these programs?

Sure. The dollars were a point in time. That's how we arrived at these. And so to the LAO's references and comments we have, since the Governor's Budget proposal, have been working with counties to assess expenditures. It's always in the lag, as I referenced in a prior item with the county data. But Department of Finance, do you have more you want to add there?

Yeah. So, to address the LAO's question on that, we do have updated expenditures for all three programs. So, when looking at just local assistance, the remaining balances for each of the programs from the 2022 appropriations are based on the reported expenditures through March of 2024.

We note that no expenditures have been made to the Bringing Families Home and Home Safe allocations. So, for Bringing Families Home, it was reported as 87.8 million. Home Safe was 87.8 million as well, and HDAP was 140.5 million.

And Claire Ramsey, for the Department, just to contextualize how the reversion would work, is that the money would come out of those remaining amounts at the beginning of the next fiscal year.

And then to the LAO's point, the counties would basically see what remaining funds they had within their allocations after we adjusted and continue to operate the programs for as long as they could. Redistribution could happen between counties, but likely there will be counties that run out of funding prior to the end of the fiscal year.

Thank you for that. We will definitely need to make sure that we, very concerned about Home Safe program. Again, looking forward to working with the Administration to see if we can find some alternative methods of savings. We cannot let our foot off the gas when it comes to homelessness.

Again, understand tough decisions, but I think we can still be a little bit more creative in terms of coming and preserving some of these very, very successful programs, the kind that we like. Moving on to immigration services.

Sure, for Rapid Response. Again, the Federal Government is responsible for immigration policy and migrant processing. However, it largely falls to local and state governments to address the post-processing needs of new arrivals.

So CDSS-funded nonprofit partners welcome, provide shelter, administer services to hundreds of vulnerable migrants who would otherwise be released by federal authorities directly into border communities in California.

Just last month, on April 15th, the Governor signed Assembly Bill 106, which re-appropriated 79.4 million General Fund from the 2021 and 2022 budget acts to continue to support the southern border humanitarian effort.

The May Revision proposes to reduce the Rapid Response Reappropriation Authority included in this legislation by 29 million General Fund to assist in closing the shortfall. The reduction won't impact the services currently being supported in San Diego and other parts of the border as early action funding would support services in 24-25, the budget year.

We do expect there to be sufficient current year savings in border operations to restore the $29 million, and the Administration will continue to assess the details of those potential savings based on current projections and operational needs. Glad to answer questions.

Department of Finance.

Thomas Locke, Department of Finance. Nothing further to add but would be happy to answer any questions.

LAO.

Juwan Trotter, Legislative Analyst's Office. So, we're still working to better understand how much resources still remain, as well as if the counties or organizations have received any additional federal funds since January and if so, how much.

Obviously, we want to maintain the infrastructure when it comes to the best practices that have really been created there along the border. Definitely happy that the Federal Government is foreseeing more money being kicked in to help us with that.

My greatest concern in January, of course, was that as we can no longer fit the Bill for the Federal Government, the concern was the Federal Government wouldn't get anything, which means further destabilization and continued pressures on local government.

Are we seeing signs that we might be able to get through this without having to cease those programs that have been working so well?

Thank you for the question, Chair. Yes, we are working very closely with the nonprofits to both maximize and leverage the federal awards that have been made to date. To your point, for federal fiscal years 23 and 24. The funding has been over $93 million to support those communities.

So, that is the funding that we were looking to see would materialize in our previous conversations in the Committee. And so, yes, we are absolutely looking to leverage and utilize those dollars first and then utilize this additional funding on the, on the rear.

And again, we do expect there to be, because of the federal dollars, some unexpended dollars in current year that could support the $29 million proposal in the May Revision.

Thank you very much. Let's go on to chaptered bills.

Yang Lee with the Department of Social Services. Sure. So, for this section covers a couple of legislative chaptered legislation costs related to those proposals. I mean, to those legislation. And here includes around $45 million, 23 million General Fund to implement various required chaptered legislation from the '23 Legislative Cycle.

Among them includes $38 million to implement SB 616 by Senator Gonzalez, which provides 60 hours of IHSS services, paid sick leave provided to the providers $1.2 million by a to implement SB 578 by Senator Ashby.

Do me a favor? It's always hard for us to follow if you don't go by the order of the sequence. Yeah. I'm more of a simple guy, you know.

So, the next one is just a technical change for the most part, for facility management assistance. Last year, in last year's budget, there was funding that was re-appropriated. We made some technical errors in how we drafted the budget bill language. So, this corrects that. Juvenile courts, though, on this one, it's to provide funding for. Sorry.

Little bit out of place. Because I wasn't going. I wasn't consistent with.

No, take your time. We're going to be here for a while. Take your time.

So, for that, for juveniles. Right. So that provides funding to support families and needs reunification services. That is for both SB 954 and also AB 937. So that covers both of those two.

The last bullet there on that page 10 is $500,000 to support the implementation of AB 1163 by Assembly Member Rivas, which records Department to collect data and report on LGBT disparities reduction. Cal-Learn and those two first two bullets on top of 11 is approximately around $312,000 to implement SB 521, which removes sanctions for Cal-Learn participants.

I covered the reunification, minority pupil meals. That's also state positions to also help address the workload, especially with the chaptered legislation by Senator Skinner for pupil meals. For refugees, it's $82,000 to implement SB 465, which supports the county welfare departments to post a single page on our website listing other website listing refugee services.

And the last one, which is going outward. Apologies. Elderly independent. Right. So, $173,000 to implement AB 1417 by Assembly Member Wood, which overhauls to simplify the elder and independent adult abuse reporting processes for mandated reporters who report abuses that are, that occurred at a licensed long-term care facilities.

Department of Finance.

Thomas Locke, Department of Finance. Nothing further to add.

LAO.

Angela Short, with the Legislative Analyst's Office. We'll be reviewing these specific proposals in more details in the coming days, but for today, we did just have a few preliminary overarching comments with the Legislature to consider. First of all, of course, we recognize, you know, this is chaptered legislation, so we know that these were all legislative priorities.

That said, the Legislature may wish to consider that given the current budget situation, any additional funding to implement new programs necessitates an equal amount of reduction or budget solution from somewhere else in the budget. So just, you know, the Legislature has those tradeoffs to consider. And then additionally for those proposals that have an impact for state operations.

Something we'll be working to better understand over the coming days is what interaction that may have with the administration's broader proposal to reduce state operations by 7.95%. So again, that's just a question we have at this point, and we'll be working over the coming days to get answers to those questions. Thank you.

Thank you very much. Anything? Okay. Yep. Go ahead, Mister Lee.

To build on LAO's point about the implementation of chaptered legislation, is this a consideration LAO's suggesting for us across the board, not just in this area?

You mean raising the trade-offs of implementation?

Right. Because it's obviously, we're implementing bills in every single Department.

Yes, that's right. Yes.

Would it be possible for LAO to help us estimate what that would look like if we were to save, you know, because we have legislation broken up many different parts, many different budget subs. Would that be some information, some of the information you get the Legislature?

Ginni Bella with the Legislative Analyst Office, that's certainly something we can take back. We, we don't have as much insight into other divisions within the office and how much transparency they have around that, but something we can take. Take back the question and report back to Subcommittee staff.

Right. Thank you. It's just as an interesting point for us to consider because, you know, implementation of our bills, they don't, most don't even hit the million mark, but I wonder in totality and.

How much do they add up to?

Yes. Exactly. Thank you.

Thank you very much. Let's look at other adjustments.

Sure. The next one is we're going off into BCPs now, budget change proposals for the first one is the maintenance of the County Expense Claim Reporting Information System. This is a proposal to continue limiting positions that we have were approved last two budget cycle ago. These positions would support the Department and continue to maintain and operate the CECRIS system, which is a system that used to reimburse counties for a lot of their claims.

Without the positions, we won't have that support. So that, so we could. So, we won't be able to provide the continued support to the counties ensuring that claims are being paid timely. So, this is really critical for that purpose. I'm going to do the EBT. Next one is summer EBT. Which wanted the folks be aware of that.

We're changing the name of the summer EBT to be Sunbucks. That's the new name of the program.

To what?

Sunbucks. Sunbucks.

Sunbucks.

S U N Bucks. B U C K.

This is actually. A change that the Federal Government has made to rename the program sun as in highlighting the summer and bucks as in cash. So Sunbucks is the new name for summer EBT.

They had that much time on their hands. Okay. Okay. Just keep going. Just keep going.

Sure. So, we're requesting 2.5 million in the budget year, and which would go down in the future years to around $1 million to support some long-term and short-term positions to implement the Sunbucks program. I want to note this is a program that we committed to as part of last year's budget. We're bringing.

We're going to be. We're estimating bringing over $1 billion in federal benefits to support a lot of the families over the course of the summers, to provide, to have meals over the summer. As part of this new program, we're required to do a couple of things, which is develop policies, implement and implement the program.

But also, there's an IT component that we're also asking resources for so that we could develop an IT for this project, for this new program. And happy and answering questions with that.

You can just keep going through the.

Sure. And then.

Other item.

Sure. Child welfare. So, this is relative child welfare training and funding. This is relatively. This is more of just a technical change that we're doing. So, for the most, there's funding that we provide through to contractors to help with the training processes.

We want to bring in some of the training in-house, hire some staff to do those training instead. So. this is the shift of funding. No impact to the General Fund by any means. We're taking money that goes to the contractor and we're going to hire a couple of staff just to do those work instead.

And then the last one is the Gaurdian Background Check System maintenance and operations. This is requesting $300,000 for two years to help with the cost of the system. We're coming to realize that the cost has increased a little bit more than what we initially had projected before.

So this helps provides that balance and ensures that we can continue to maintain this background check, make sure that a lot of the folks who are going through the licensing are getting, they're back on track, done timely.

Thank you very much. Department of Finance.

Thomas Locke, Department of Finance. Nothing further to add.

LAO.

Similar to our prior comments, again, these are new proposals. So, we would just flag for the Legislature if there is a proposed cost associated with these proposals that will necessitate solutions or funding that is not going to another area of the budget. So, those are trade-offs for the Legislature to consider.

And then again, for those programs or these proposals that have a relationship to state operations, we will be looking into, again, how that will work in relationship with the overall proposal for the 7.95% reduction to state ops across government departments.

Thank you very much. Additional questions on this item. Let's move on to the next, local assistance.

Sure. So, I think this one. Director Johnson's already covered in her beginning remarks already about the increases to the grants based off of local realignment. So, I'm not going to cover that.

Okay, so the next one is Jennifer Troy on behalf of the Department. The next one is the elimination of the comparable disqualification policy. This is both local assistance and it was also going to show up in your trailer bill item.

We currently have a policy in the CFAT program in statute where if the participants are being sanctioned in the CalWORKs program, we carry that sanction over into the CalFresh program. This is something that is changing within the CalFresh program. And normally what we try to do is align the CalFresh program with the CFAT program.

These are the statutory changes to make that alignment, and these are the dollars associated with that. We will no longer be sanctioning individuals in the CalFresh program as a result of things that have happened over in the CalWORKs program as of October 1, I'm sorry, August 1, 2024.

The next item is related to federal reporting that is required for states, for county child welfare agencies, and probation departments to report missing youth, to law enforcement authorities for entry into certain national databases. And again, this is the funding that is required here. And there is also trailer bill in the next item.

And then the next bullet pertains to the child welfare stabilization, which was the original solution as part of Governor's budget. We're no longer pursuing that. So, we're strike, we're making changes to the budget, but to ensure that that language is no longer reflected. The last bullet, I spoke about that earlier already.

For the child welfare training, interactions between General Fund and state operations and local assistance. The next page, on page 13, is just a whole slew of changes that happens with our local assistance budget. We make a lot of technical changes, and this is just represents the technical changes that occurs as part of that.

Go through each one of them, please. I'm only. All right, Department of Finance.

Thomas Locke, Department of Finance. Nothing further to add.

All right. LAO.

We'll be reviewing these proposals in more detail in the coming days, but no specific comments at this time. Thank you.

Okay, let's move on to budget bill language proposals.

Sure. So, the first issue is the FRA, which is the pilot project that we're applying for to that language. And the last two bullets pertains to just to the extent that we are approved, the state is approved to be part of the pilot.

That gives the Department of Finance authority to provide some resources to the Department, to hire staff to provide resources to the counties to do some of the work, and some automation change. So very simple in that context, just gives them authority to do that. The second language pertains to the able-bodied dependent rule.

So, for this one, it's the same notion, gives the Department of Finance the authority to give us some resources to extent that the Feds determine that we no longer meet the, we no longer are eligible for the waiver for the Ab Bod, and to the extent that we have to implement that, some resources for that purpose.

The next bullet is relatively a technical change. I'm sorry. This is a re-appropriation. Apologies. So, this is a re-appropriation of $2.7 million related to the BH-CONNECT program. This funding will give us another year to spend that funding. The fourth bullet is a technical correction that has to do with reappropriation languages, including the Governor's Budget.

It had, we mislabeled a specific budget item and this provisional language just correct that, and I'm happy to answer any questions.

Thomas Locke, Department of Finance nothing further to add, but happy to answer any questions.

LAO.

Thank you, again. We'll be reviewing this language in additional detail in the coming days, and we'll be sure to raise anything for the Legislature based on that more detailed review. Thank you.

Obviously, as we continue to review budget Trailer Bill Language, we'll be, I'm sure, having some good, robust discussions going back and forth on a lot of these items. Certainly there's some priorities that this Committee has as well that we want to make sure that we incorporate in this process. So looking forward to the continued conversations. Any additional? No? Anyone? We good? Thank you so much. Oh, do we? Yeah, we need to go through the Trailer Bill - new Trailer Bill proposals.

Happy to do so. The first Trailer Bill proposal is one of the most significant, which is with respect to updating the Trailer Bill Language that we proposed in January related to the Foster Care Permanent Rate Structure Reform. After the January budget proposal was released and the Trailer Bill Language was released, we had conversations with you all. We also held 15 public meetings and received an extraordinary amount of comment from the public related to that Trailer Bill. We have now submitted updates to that Trailer Bill to you.

I will not highlight all of the items, but perhaps we'll just take the opportunity to highlight the most significant. One is with respect to comments that we heard related to youth who are in supervised independent living placements. So these are non minor dependents who are living fairly independently. The comments that we heard were that stakeholders felt that it would be very important for them to not need to go through a financial management contractor and have a more burdensome process in order to access the $500 in strengths building funding that was built into our proposal.

As a result of those comments, we have restructured the proposal so that the youth who reside in those supervised independent living programs would receive that $500 and manage it directly themselves, ideally with the support of family and caseworkers. So that was a significant change. We also heard questions from folks about the strengths building funding and how we could better bridge to permanency. So as you leave the foster care system and enter into adoption or guardianship or reunification, how do those resources remain available to you?

We have added to the proposal language to clarify that for youth whose permanent plan is reunification, they can be empowered to lead that decision making with the active support of that parent, and that youth who exit to permanency can retain the funds that are already set aside for them for strengths building through the remainder of that fiscal year.

To bridge to permanency. We removed also some background check related language that was causing some confusion. We were not intending to create new background check requirements, but rather to reference the existing ones. So it was unnecessary for us to keep that there and continue to create that confusion. With respect to the immediate needs portion of the funding, we have changed in the proposal the default for how the immediate needs funding works for youth who are placed in short term residential therapeutic programs.

So more specifically, the new proposal is for those STRTP providers to be the default providers of immediate needs services unless the county makes a specific determination that it's in the child's best interest for those services to be provided by another entity. And finally, I would emphasize that we have added a proposal to require increased coordination with respect to immediate needs between local child welfare and mental health agencies. So that's the longest Trailer Bill item I think we had, because it is, it's pretty significant, so we can probably move through the rest more quickly.

Thank you. I'll take the next one. Claire Ramsey for the Department. This is the facility inclusion for Community Care Expansion Preservation Program. The May revision proposes Trailer Bill Language to allow CDSS to accept a legally enforceable agreement in lieu of a deed restriction for facilities awarded funding for operating subsidy payments in the Community Care Expansion Preservation Program.

The requirement for the deed restriction was posing significant barriers for participation in the operating subsidy program and we wanted to amend to ensure that both people who are renting their properties and own their properties could participate in the program. This amendment will increase the number of eligible facilities within tribes and communities applying for the fund and being awarded fund and will not increase the cost of the program.

The third Trailer Bill item we already covered with respect to the local assistance funding for the federal reporting and communication requirements related to missing children. The fourth one is related to the specialized care increment eligibility. The proposed statutory changes would allow tribes who have a Title IV-E agreement with the state to create their own specialized care increment rate setting system for children under their jurisdiction and would also clarify that children under county jurisdiction who are placed in tribally approved homes can continue to receive the county's specialized care increment where that applies.

The next item is related to the Resource Family Approval Program alignment with the Emergency Caregiving Funding Program. The proposed statutory changes align what is currently a 90 day resource family approval application processing time with a 120 day emergency caregiver funding timeframe. The next item is related to the state and federal Kinship Guardianship Assistance Payment Program, and this is a program alignment.

So the proposed changes eliminate a $10,000 cash savings and personal property asset limit for children and non minor dependents who are recipients of the Kin Gap Program and clarify that income and property they receive after the date when they start receiving aid is disregarded. The limits that we currently have are not required by federal law and they are barriers to saving for a successful transition to adulthood for children and non minors who receive Kin Gap benefits. There's no cost increases to the state related to these proposed changes.

The next item is the Excellence in Family Finding, Engagement and Support Program. This this proposal would allow for small counties and tribes to - I'm sorry. It's alleviating a barrier for the small counties and tribes from accessing the one time funding for the program by allowing them to submit a written request for authorization to use program funding for a portion of a full time position for family finding activities which the statute currently is restrictive against their ability to do.

The next item is the Supplemental Nutrition Assistance Program or CalFresh reimbursement. The proposal codifies the policy for reimbursing electronically stolen CalFresh food benefits that was established under federal guidance and therefore overrides the former state benefit replacement policy that we had implemented as a result of a court ruling. The next item is the Tribal Nutrition Assistance Program.

We are removing verbiage in the statute that references the food distribution program on Indian Reservations from the program. The language that is there is unnecessary. It currently says that a tribe cannot receive this TNAP assistance funding if they don't also participate in the FDPIR program, which frustrated the purpose of the program to provide the additional resources to tribes. So it's a technical adjustment.

The next one is the CalWORKS intensive case management hourly increase pause. This is a proposal that we have discussed in prior hearings. This is the statutory changes related to that change. Following that, we have the California Food Assistance Program elimination of comparable disqualification. We discussed this in the last items related to local assistance. With respect to family reunification and the delay of implementation.

This is related to budget item that occurred in 2021, which enhanced CalWORKS family reunification services by authorizing the Cash Grant and childcare services for families whose children have been removed from the home to continue on the CalWORKS side, there were unforeseen implementation challenges and additional time is needed in order to automate the change and the counties are unable to implement until that automation occurs. So this is changing the date in the statute to reflect implementation. We've already discussed the maximum aid payment increases or the statutes to affect that change.

Claire Ramsey for the Department. Next, I'll go to the data sharing to quantify the impacts of the safety net on the whole Californian. This is a non fiscal TBL proposal that would allow CDSS to receive data and report on outcomes relating to the housing stability for participants in various human services programs, including our CDSS Housing and Homelessness Programs. State law requires that CDSS measure the impact of its safety net programs, including those from its Housing and Homelessness Programs.

The statutory authority would allow us to access data from the housing data integration system that is housed at the business, consumer services and housing agency so that we could receive person level data to help us perform those outcome data analysis.

Almost done. The next item is the California Food Assistance Program and it's related to the over issuance retention rates. This was a January proposal that we previously discussed, but we need to make a technical change. We just referenced the wrong statute in the prior version of the Trailer Bill and are updating that here.

The next is the IHSS Permanent Backup Provider System TBL to effectuate the elimination of the program instead statute and was discussed earlier.

We also discussed earlier the Work Incentive Nutrition Supplement Program and the proposed elimination of that benefit. There are statutory changes that would need to accompany that change.

And the last one is the In Home Supportive Services for Undocumented Individuals. This is the TBL necessary to effectuate that elimination. I would just note that there will both be TBL needed on the social services side but also on the healthcare services side to effectuate this change.

And that is it.

Department of Finance.

Thomas Locke Department of Finance. Nothing further to add, but happy to answer any questions.

LAO.

Angela Short with the Legislative Analyst Office. We will be reviewing all of the Trailer Bill in more detail in the coming days. For today, we do have a few comments regarding the updated language for the foster care permanent rate structure. Based on our initial read, it does seem that the updated language has made a number of amendments that are directly responsive to stakeholder feedback. Chief Deputy Director Troia gave a few of those examples, such as the Strengths Building Dollars for non minor independents going directly to the youth to facilitate that self determination model.

So overall, it seems that the updates are indeed responsive and will continue working with stakeholders and the Administration to see what additional questions or concerns remain with the language overall. One additional area we did want to flag for the Legislature is that the amended Trailer Bill includes trigger language specifying that the Department of Finance would make a determination in the Spring of 2026 whether the General Fund has sufficient resources over the multi year to be able to support implementation of the new rate structure. And should the determination be made that these resources are not available, the rate structure would not implement and the current rate structure would stay in place as is described in current law.

We're not sure whether trigger language really makes sense for this proposal. For example, we already know that it's going to take time for stakeholders, the Administration and service providers and other partners to prepare to implement this language. Over the next couple years, these various entities are going to be making many preparations in order to be able to begin implementation at the July 1, 2026 planned date.

Ultimately, if in the Spring of 2026 it's determined that resources are not available and that implementation does not occur, it doesn't seem to make sense for so many entities to spend all of that time preparing, then ultimately just not to implement. So rather than adopting the trigger language, which defers the decision to the Department of Finance whether to implement at all, what are the tradeoffs if the Legislature were to consider a delay in implementation?

In other words, the Legislature could essentially wait to make its own assessment in a year or two, whether, once the state's fiscal picture becomes clearer, where, in terms of the Legislature's priorities, implementing the new rate structure falls. So those are some considerations we would raise again to ensure that the Legislature has a role in the decision making regarding implementation of the new rate structure. Thank you.

Thank you very much. Many discussions to be had. We are going to recess for about just five minutes. A lot of Bills have fallen today, and we want to recess for five minutes for the mourning of the loss of the many Bills today.

Given sufficient time for mourning, we are now back in order. Issue number three. State Council on Developmental Disabilities. You may begin.

Thank you, Mister Chair and Members, Aaron Carruthers, Executive Director of the State Council on Developmental Disabilities. Mister Chair, we have four proposals in front of you today. They're largely technical, somewhat similar, and none are going to cost the state any money. Would you like me to present them individually or I can streamline and present them together?

Individually, please. Just so that we can document everything in the record. All that good stuff.

Yes, sir. The first one is the State Council is requesting an increase in federal authority for a position that's a support services analyst. Our success is amplified by personnel who bring lived experience as people with intellectual and developmental disabilities to their jobs and to their profession. And at times individuals need additional support in their roles. So the support services analyst would provide reasonable and necessary support for those other currently existing employees to be successful in their positions.

Thank you very much. Department of Finance.

Omar Sanchez with the Department of Finance. Nothing further to add.

LAO.

Yes, Mister Chair. Mark Newton, Legislative Analyst Office. Maybe just make an overriding comment. You will see before you a set of fairly modest proposals by the State Council. We're raising no concerns at this time with respect to any of them. We just received the budget change proposals this morning. So in the process of reviewing, we'll let the Committee know if we have any concerns.

Okay, go ahead and present the next two together, one after another and then we'll continue on.

Yes, sir. Thank you. The State Council requests an increase in reimbursement authority for one position to support the statewide self determination Advisory Committee. This Committee facilitates the sharing of best practices and training materials to support the self determination program, which is administered through the Department of Developmental Services and Regional Centers.

The State Council is mandated to organize and support this Committee. However, the existing staff are unable to absorb the growing and complex workload from this Committee. So the council is supported by a multi year interagency agreement with DDS for funding for this Committee. And we are requesting one position to be able to have permanent ongoing expertise for this Committee.

Okay. And those were the next.

Thank you. I tried to streamline and then I paused for you. The next one is the State Council request increased reimbursement authority in two positions to provide orientations and trainings related to the Self Determination Program for the Department of Developmental Services. We have been performing this work since October of 2021 through an interagency agreement with DDS, and this proposal would be funded by the currently existing multi year agreement to provide ongoing position authority to ensure continuity and consistency in the deliverable of these self determination program orientations. Again, these results in no increased state cost because the interagency funding comes from the currently existing DDS Budget Authority. Thank you very much.

Department of Finance.

Omar Sanchez with the Department of Finance. Nothing further to add.

Okay, LAO, any others? You're good? Okay, thank you so much.

There is one more.

One more. What am I missing? You cover Budget Bill Language. Right?

There's a go kits. The reappropriation of the reimbursement authority for the grant that we have to provide go kits for individuals who attend our.

Oh, I see.

Emergency preparation trainings.

Awesome. Okay. Department of Finance.

Omar Sanchez. Department of Finance. Nothing further to add.

You sure?

I'm sure.

Okay. I'm only playing with you, LAO.

Nothing further.

All right. Thank you so much.

Thank you, Mister chair and Committee Members.

Appreciate you. Okay, moving on to issue number four, May - Department of Aging.

Good Afternoon, Mister Chair and Member. Mark Beckley, Chief Deputy Director for the California Department of Aging. Just to preface my remarks, just a couple of notes. One, Director DeMarois couldn't be here today because she's covering the Senate hearing. So we just are dividing and conquering with our hearings. And then second.

So she likes them better than us, is that what.

I did not say that. We drew straws. So. And the other preface were my remarks is really just providing a lens and criteria for how we adopted reductions for our budget. We really looked at two key factors. One is reducing programs that had not yet launched and therefore didn't have a constituency. And then the second key factor are we're preserving baseline funding for our core programs. So as I go through these two reductions, I'll kind of explain them through that lens. So the first program is our older adult behavioral health initiative. This was originally budgeted at $50 million over several years. The funding supported three components.

The first component is extending the vital resources. That is the Friendship Line, which is a 24/7 warm line for older adults to connect them live with specially trained staff in multiple languages. This really has proven to be a valuable resource. Throughout the COVID-19 pandemic, as adults were facing increasing levels of loneliness and isolation.

The second component is embarking on an ethnic media campaign to address the compounding effects of stigma, bias, and discrimination and to encourage diverse older adults to identify their mental health needs and seek support. And then finally, is establishing the community capacity building grants to strengthen the behavioral health safety net.

It's that last program that we're proposing to eliminate. We have not launched that program. The purpose of the program is really to expand community behavioral health supports for older adults, and we do hope to do that at some point in the future. In the meantime, we do have supports in place for older adults.

I mentioned the Friendship Line. The Friendship Line handles calls from 300,000 older adults annually, so it's very significant. And then with the passage of Proposition 1, the Behavioral Health Services Act, we think that that, in concert with the Medi-Cal Behavioral Health transformation, will also identify avenues for support for older adults and family caregivers. So I will pause to see if there's any questions on that.

Why don't you go to the next item? The next bullet?

Yes. So the next item is the reduction to the Older Californians Act modernization program package. That package was proposed at a total of 187 million over a total of five years. 76 million of that package has already been distributed to our local area agencies on aging. And I'll just briefly describe that. Money is split between two pots.

One is 15 million specifically for nutrition programs, and then the other pot is 51 million for other community supports for older adults. What we're proposing to eliminate is 111 million of the 187 million tied to older adult nutrition programs. These dollars are allocated approximately in $37 million increments over the next few years.

What this money was intended to do is to continue to serve new participants that were brought on during the COVID pandemic, as well as support the increasing food needs as a result of California's growing aging population. What you'll see and I talked about protecting our baseline funding for this core program.

If you compare the 22/23 nutrition budget to the proposed 24/25 level, you'll see it's approximately the same. There's a decline of $5 million associated with funding that was provided during in the home and community based spending plan. But that was one time funding and we understood that that would be going away at some point. So the 37 million for the first year installment of Older Californians Act nutrition would have covered that gap as well as provided for any additional participants that may have come on during the COVID pandemic.

The impact on clients and meals is really going to vary widely across the state and within each AAA, as each local program currently provides nutrition services according to their community's needs. CDA is going to work with our AAA partners to collect and assess the impacts of this reduction, and we can certainly report back what we find.

However, we do note that there are other resources available to serve older adults nutrition needs. First, I mentioned that 15 million that was allocated in the current year for the first installment of Older Californians Nutrition Act funding. That funding will continue to be available through March of 2026, so the AAA's can draw upon those funds.

Additionally, that $51 million that I mentioned, which is community support funds, we're looking to provide additional flexibility with those funds to allow the AAA's to use that for nutrition services as well so they can prioritize their needs locally. And then, of course, our AAA's are currently skilled at redirecting participants to other food programs, such as food banks, CalFresh and Medi-Cal tailored meals.

And then, you know, one final note on this item that I just really want to highlight is over the past five years, due to the tremendous support of the Legislature as well as the Federal Government, we have seen funding for our older adult nutrition program grow by 68% or 67.5 million. And this has allowed us to offer 3 million additional meals to older adults throughout the state and serve over 100,000 new participants. So it's just been great growth, great support for this program. The 37 million would have allowed us to even close that gap even further. But, you know, we have seen significant growth in support for this program.

Okay. Department of Finance.

Ty Ulrey Department of Finance. Nothing to add.

LAO.

Juwan Trotter. Legislative Analyst Office. So we're still in the initial review of both of these proposals. A preliminary question we do have for the elimination of the Older Californian Modernization Act is where we at with the services already being provided and what the impact will be on those populations already being served.

Thank you for that. I do have a question in terms of if we are eliminating the behavioral health program, where are we expecting them to get their behavioral health needs?

Right. So currently we're - we don't, since we didn't launch the program, we don't have clients currently receiving services through that program.

Okay.

So we would - we would, you know, like, as we do now, either direct them to either nonprofit, community based providers that currently exist. This program was really intended to expand behavioral health services for older adults. So, yeah, we're not.

So there's no clients that will not be cut off from any services? There are no current clients at this time.

Correct.

That is great. Okay. Good to know. Questions in regards to these items. Okay, why don't you cover the next four bullets and other adjustments?

Great. Absolutely. The first adjustment is really what we consider to be a technical adjustment. We are redirecting funding internally within our Department to meet a new federal requirement, which is to provide level of care nurses at state departments to provide level of care reviews for our multipurpose senior services clients.

Previously, this activity was conducted at local level by our local providers, but the Administration for community living made a change, and now they're requiring that state departments need to take on this function. The second request is to expand our CalFresh Healthy Living Program. We received CalFresh Healthy Living Program grants through the Department of Social Services.

They received additional money from the Federal Government. So our allocated amount is 2.5 million. So that's just going to allow our AAA's to serve more clients through that program. The next two items are really technical adjustments, and these are intended to true up our Federal Fund authority with our federal grant amounts.

And so this will avoid us having to do what's called budget revisions to pull in additional federal dollars to meet our needs. And then the last item is really a chaptered Bill to collect and secure demographic information for our LGBTQ clients. So this would really allow us to hire an additional staff person to perform this function. So that's a funding request.

And so you just covered the chapter bills in a revision. Okay. Department of Finance.

Ty Ulrey, Department of Finance. Nothing to add.

Okay. Lao.

Juwan Trotter. Legislative Analyst Office. We're still reviewing these, but nothing more to add at this time.

Okay, Committee Members, anything? Nothing at this time. Thank you so much. Moving on to issue number five. Department of Developmental Services. And you may begin when you're ready.

Thank you, Mister Chair. Carla Castañeda, Department of Developmental Services. The May revision proposes for the Department of Developmental Services $15.4 billion Total Fund, 10 billion General Fund. This is a 1.9 billion Total Fund increase over the revised current year. This would support a caseload of 465,000 individuals. I'll go right into the agenda and address the items.

Please do. You're going to cover the first five bullets and then we'll pause.

Okay. Thank you. For the area of solutions, the mayor vision continues the items proposed at the Governor's Budget. So the the rate reform delay. Additional items were identified to try to minimize the impact on individuals and programs. The first item listed here is for our health and safety waiver assistance. This was funding that was dedicated to support the Regional Center requests for individuals who are non English speakers.

The other program for health and safety continues. This doesn't end that program. Given the limited information we collect today, it's not exactly clear necessarily that these dedicated resources had a change in the number of requests received. Another question, I think in the agenda related to solutions was if there's other ways to address it. While in 21 we did try a number of initiatives to address outreach to inform individuals of services.

We also had language access and cultural competency resources and those might still help with Regional Centers in what they see as needed in their catchment areas. The next item is for the emergency preparedness resources. This is 1.1 million General Fund and it is primarily for batteries and go kits for individuals impacted during emergencies.

Again in 21/22, this funding started at a higher one time amount to establish the process, but also looked at ongoing resources to help individuals during the annual emergencies. At the same time, there was an emergency coordinator established at each Regional Center. That would continue in the proposed budget. Those are currently filled at all the Regional Centers and that they coordinate directly with the departments emergency coordinator. The next item in the agenda at solutions is the DSP internship program and this was part of the workforce stability package in 22/23. These were one time dollars to help expand the DSP workforce.

It took a while to establish the program and ramp up, but we do have today 16 interns participating in the program. We don't yet have information on the number of individuals served, but we'll continue to monitor that implementation. The proposal leaves 2.5 million General Fund in the program which continues the participation today as well as the contracted resources. The next item is the tribal engagement and outreach for early start services. We omitted sharing this on - it was missed in our presentation at Governor's Budget, but we had proposed to to expand the tribal outreach.

Currently the $500,000 is supporting three Regional Centers doing that outreach. The proposal would have expanded that to additional Regional Centers, but we had not identified who those would be yet. So this just brings that to maintaining the current year funding level. And then the last item there is the coordinated family support services.

Well, not really tracked as a solution from our perspective, we were focusing on the delayed implementation and where those expenditure experiences today. So we did bring that down to 9 million in the current year. That is funded partially with HCBS funding resources. The remainder is with General Fund. This program has 16 Regional Centers have implemented that serving almost 400 individuals and then it is part of the home and community based services waiver. So going forward the services will be captured in the support services budget category.

Department of Finance.

Chris Odneal, Department of Finance. Nothing further to add.

LAO.

Yes. Mister Chair and Members. Mark Newton, LAO. Just to comment briefly on the proposal to - on the related to the direct support professional internship program. That's the largest of the budget solutions. We think it is a reasonable solution. It helps to address the budget problem by focusing on a one time temporary commitment rather than reducing a base program or core services. The other budget solutions do have some impacts, as it was noted in the ones related to outreach. There are some alternative resources available for outreach activities, but it's not a one for one. It would be sort of a consequence of that. Thank you.

Thank you very much. Additional questions? Comments? Mister Lee?

No questions. But just to reiterate that as I brought up in our earlier hearings, they still remain very concerned about the rate reform delay which would impact very quickly a lot of our constituents across California. And I know a lot of - having talked to a lot of the centers in my area, a lot of people were banking on those for modest pay raises for their providers out there. So I still remain very concerned about this on top of the changes we see in the May revise. Thank you Mister Chair.

Thank you very much. Let's move on to other adjustments.

Thank you Mister Chair. The first two bullets here are both related to the reimbursement system project. This is modernizing our current way of collecting federal reimbursements. So in the current budget, nearly $5 billion. The project has been delayed in implementation just as we're working through testing requirements. The two combined proposals is requesting 3 million new General Fund to complete that and move into the maintenance and operations. It does include provisional language that would make that contingent upon approval of the next phase of the project. And then the second bullet is re appropriating funds that had originally been budgeted for this project but are still available given the delay. The last. Oh, keep going. I'm sorry.

Keep on going.

The uniform fiscal system modernization and the consumer electronic record systems. This was one of our largest proposals. Initial planning began with the home, with the HCBS spending plan dollars. We are still working on approval for the alternatives analysis, but during the market research in that, seeing that the activity still continues, we are on target for request for proposal next winter. So this is a slightly reduced funding level from the current year, but would continue the planning efforts.

The next item and other adjustments is a technical correction to our Governor's Budget. Employee compensation adjustments. That is 20 million Total Funds, 18 General Fund thousand. And then the next one for employee benefits is again a technical that was omitted at Governor's Budget. The next two items are for state operated facilities.

The first one is for the complex needs program updates. This is a decrease as we worked through executing the lease agreement and planning for the development of the homes. There would be a delayed need for the staffing that would support the program. So the 7 million reduction just reflects that those staff wouldn't be needed as early in the budget year. The next item is the state operated facilities reimbursement. So for STAR homes, we had originally budgeted reimbursements at the same level as our purchase of service. But reimbursements do depend on an individual's eligibility. So this reflects the recent experience in the STAR home claiming.

Okay, was that the last bullet there?

Unless you want me to do budget Bill as well.

Oh no. You cover caseload and utilization, correct?

Oh, sorry. Sorry. Thank you.

Okay. I was like, did I like, blank out or something? I thought I like lost time. I got concerned I was about to check my blood pressure.

No, you're correct. I had envisioned that with the original comment, but, yes, there is a minor adjustment. We are anticipating an additional six, almost 7,000 individuals with the May revision. As we got new claims data, saw some changes in some of the expenditure trends. So this last proposal is $41 million General Fund and $32 million reimbursements.

Okay, thank you very much. Department of Finance.

Chris Odneal. Department of Finance. Nothing further to add.

LAO.

Yes. I'd just like to note - Mark Newton, LAO - on the two IT project related proposals, our IT colleagues at the LAO have reviewed the proposals. No concerns. We note that the reimbursement system it project, we would consider the spending proposal as non discretionary, given where the project is in the system, the one called the Uniform Fiscal System Modernization Project. Well, that would be a discretionary expenditure given its connection with the implementation of rate reform. We think that is a legitimate, reasonable expenditure to allow sort of rate reform implementation to proceed effectively and efficiently.

Okay. Any additional questions, comments on this item? Okay. Budget Bill Language proposal.

Thank you. The annual Budget Act includes General Fund loan authority that helps to cover the lag in claims for reimbursements. That's generally approximately 20% of the total reimbursements for the year. This provisional language change is updated for the revised estimate of reimbursements for 2425.

Okay. Department of Finance.

Chris Odneal. Department of Finance. Nothing further to add.

LAO.

Nothing further.

Okay. New Trailer Bill proposals.

Thank you. The first one is for provisional eligibility assessment requirements. This program began in 2021 for 3 and 4 year olds and then was expanded to include birth through two. Given the experience in implementation and limited clinical resources to complete those assessments, the proposed language would help to accelerate the screening and assessment for eligibility. The next two are related to the solutions, and the proposed amendments would align with the solutions.

Okay. Department of Finance.

Chris Odneal. Department of Finance. And just to clarify on the solutions, just these are two items that are currently required in statute to be funded, and so the amendments would just reflect the proposed solution. So.

Okay. LAO.

Nothing further to add.

Okay, thank you very much. Appreciate it. We'll move on to issue number six. Issue number six, Department of Community Services and Development. Thank you. Good to see you.

Likewise.

Good afternoon. Is this on. You can hear me. Good afternoon, Chair and Members, my name is Megan Rivers. I'm the Admin Deputy Director at the Department of Community Services. As requested, I'm here to discuss the department's 1 May revision item related to implementation of chaptered legislation for AB 1163, which will require the Department to collect additional information related to demographics, specifically sexual orientation, gender identity, and intersexuality.

The Department requests 943,000 General Fund, which would cover updates to the department's third party data collection system as well as updates at the local level amongst 60 Community Service Block Grant, or CSBG agencies. The cost at each local agency varies. The Department requires General Fund for this activity since the data collection is a state mandate and goes above and beyond what is federally required. Use of Federal Funds for this purpose would be an unapproved use, per CSBG rules. As asked specifically in the agenda about reductions in operation costs. CSD will work with Department of Finance in the fall to identify appropriate budget reductions and efficiencies that would minimize impact on programs and operations. That concludes my remarks. I'm happy to answer any questions.

Department of Finance.

Matt Aguilera for Finance, nothing else.

LAO.

Angela Short with the Legislative Analyst Office. No comments on this item.

Okay, thank you very much. Just keep us updated on this as well. Appreciate your time. Issue number seven, Department of Rehabilitation.

Good afternoon. Joe Xavier, Director of Department of Rehabilitation. Thank you for the opportunity to be here today and share our budget items with you. We have two budget items. The first one is the Employment First Office. It requests to transfer the Office of Employment First from our agency to our Department. There's $1 million that's already associated with that office, and it also creates three positions to provide the support to this office that is being newly established. This aligns with the Governor's Master Plan for Career Education.

It also aligns with the Master Plan on Developmental Disabilities, and it furthers our agency's commitment to ensure that individuals with intellectual development disabilities are moved into a competitive, integrated employment. The Department of Rehabilitation's mission is to provide competitive, integrated employment for individuals with disabilities. This enables us to streamline and remove administrative redundancies.

It also enables us to leverage all of the networks that we have, both with our education system, with our workforce system, and other workforce partners, to get individuals into competitive, integrated employment. So I can pause there and take any questions or talk about our TBL.

Yeah, let's just pause there in terms of the May Revise proposal. Department of Finance?

Nothing further to add.

LAO?

No concerns at this time.

Okay. I know when we're talking about this, this is one of our Members and certainly one of the Legislature's big priorities in terms of employment first, and so looking forward to continue to build out this so that we can may actually meet our goals. Of course, our goals are very important.

I believe we even had some Select Committee hearings this year in regards to employment opportunities. And so please, let's have some time during the break to kind of talk about this more. I want to see, make sure we're as helpful as possible when it comes to this office.

Of course.

Okay, thank you so much. We'll move on to trailer bill proposal.

So the Department is requesting through trailer bill to change our name. The term rehabilitation has long outlived its affiliation with workforce. It is more often associated with either the correctional system, drug rehabilitation, or people that are recovering from other types of illnesses.

And so we have gone through an extensive community engagement that included a wide range of disability representation from the community, service providers, partners, and included a wide range of age because we also serve youth as well as adults. While the engagement provided no mandates, it certainly very much informed Disability Works California is the name that we were putting forward.

The name both defines the population that we serve, and the tagline will certainly describe the end result of the services that we provide. This will require no additional General Fund. We are able to absorb these costs because of the increased vocational rehabilitation dollars that we were able to bring into the State of California over the last couple of years. So glad to take any questions on that.

Department of Finance?

Nothing further.

LAO?

No concerns at this time.

How much is this name change going to actually cost us? Department of Finance or Administration, it's up to you.

We anticipate that this could be up to $5 million over a couple of fiscal years.

Up to $5 million. Okay. And I'm sure that incorporates all the different changes you have to make all over the place. Right?

Yes.

Okay. That is great to know. Just want to make sure we're consistent in some of the price tags. So around 5 million is your estimate, but you're able to absorb it in your current budget?

That is correct.

Okay. Thank you very much. We'll move on to issue number eight, Department of Child Support Services. We're rolling. We're rolling. Oh, we're really rolling. Oh. You may begin when you're ready.

Okay. Good afternoon. Nan Chen, Chief Financial Officer for the Department. In the May Revision, we have a technical adjustment captured by the first two bullets in that section. The technical adjustment effectively captures our updated child support collections estimates, which has a slight increase in recoupment collections.

That increase needs a technical adjustment to decrease our federal fund authority and increase as a net zero adjustment increase our 8004 Fund, which is where we deposit the federal share of child support collections and where we would spend from first rather than drawing down from federal funds. Happy to take any questions.

Oh, you just did both bullets at the same time.

I did.

All right, stop cheating now. All right. Department of Finance?

Nothing further to add.

Okay. LAO?

Angela Short with the LAO. No comments here other than just to emphasize this is just a technical shift without a General Fund impact.

Okay, let's move on to trailer bill proposals.

Okay, so the Department has two trailer bill languages, the first being repeal California's child support automation system annual summary reporting requirements, which proposes to repeal Family Code section 17561. That section requires the Department to produce an annual report each year to the Legislature on the implementation of the calculation California Child Support automation system.

Federal law requires every state to implement an automated child support system. California was imposed financial penalties back in the late nineties and early 2000s, and those penalties ceased when the child support enforcement system was implemented in 2008.

As a result of the massive system project, the Legislature enacted Family Code 17561 to provide report out to the Legislature on the system implementation efforts, including funding and system functionality. California's child support system CSE was certified by the Federal Office of Child Support Services in 2008.

And in 2014, after five years of post implementation maintenance and operations, the Department submitted the post implementation evaluation report, or PIER, to the Department of Technology and effectively closed out the project. CSE remains in maintenance operations to date. The budget for the Department to keep the lights on for the system, so to speak, has remained flat for over a decade. And this is just an effort to kind of clean up statutory language for a report that is no longer needed.

You're just trying not to have to report to us.

It says the same thing pretty much every year, and all we do is just add the cost each year and kind of roll it from one year to the next.

I guess we'll have a funeral for this report then. Yeah. Department of Finance.

Nothing further.

LAO?

We're still reviewing the proposal, but based on our initial read, we don't have any comments at this time.

Okay, next one.

Okay, the next TBL is to repeal the improved performance incentives. The proposal proposes to repeal Family Code Section 17706, which requires an implementation of an improved performance incentive program for the top 10 performing local child support agencies to be funded by the state share of recruitment, child support recruitment.

The intent of the incentive when it was created back in the early 2000s was to encourage counties to elevate the visibility and significance of the child support program. The top 10 performing LCSAs will receive an additional 5% of the state's share of recoupment from those counties, which effectively would be paid by 100%. General Fund.

That section has basically been suspended ever since 2002 and 2003, mainly because of its General Fund impact. But also, the code is kind of slightly flawed in its design, mainly because it favors counties with more affluent demographics, and therefore they would have an easier time being in the top 10 and effectively always repeatedly receive those incentives.

More recently, the state's policy changes have prioritized child support payments to families rather than state recoupment or government recoupment. And so those changes would effectively reduce the pool of funding available for this program if it were to be implemented.

And by our estimates, it would range anywhere between 200,000 to two and a half million dollars per year if it was enacted. And spread across 10 different counties, that dollar amount would not have really any material impact as far as improving performance or making any material changes to how that county operates. And so, as a result, the Department is proposing to repeal this section, and happy to take any questions.

All right. Department of Finance.

Matt Aguilera for Finance. Yeah, we concur with all the points made, and we think that this can be repealed just given that it's been suspended. Thank you.

LAO.

Similar to my prior comments, we're still reviewing this proposal, but based on our initial read, we don't have any concerns to raise today. Thank you.

Okay. Thank you very much for this, for your time on this. We'll move on to issue number nine, California Health and Human Services Agency.

Thank you, Mr. Chair. Brendan McCarthy, CalHHS. So, going through your agenda, the first item is a budget solution at CalHHS. This is to eliminate the Health Innovation Accelerator, which we've talked about before in subcommittee. It was delayed in January budget. Now we propose to eliminate it in full.

And so that would be $55 million of savings over current year budget, year end budget year, next one. The second item in your agenda is something you just talked about under the department of the shift of the employment first office from CalHHS to DOR. And to your comments, Mr. Chair, we're happy to continue conversations at agency.

We think that DOR has the expertise to really stand this office up and successfully implement it. And so we, of course, would be supportive of their efforts. But we think they're the best place to house this body to continue our work on employment first.

But it's still within your purview?

It is still within our agency, just closer to the program experts at DOR, who would be the ones to run the office. The next one is technical item. We are asking for increased federal funds authority for the preschool development grant award of $1.2 million, just to reflect increased anticipated federal funds.

The next one is a re-appropriation for what's called the ePOSLT system. This is a system at EMSA, Emergency Medical Services Authority, that collects a physician order for life-staining treatment. It's an electronic system. They're developing that system, and this is just a reappropriation of unspent funds to continue the development. The next one is also at EMSA.

This is a reappropriation of funding for the redevelopment and re-procurement of the central registry, what we call the CEMSIS system. It's one of their systems for collecting information from local EMS systems. We're coming to the end of the contract for the existing system, and it's a very outdated system, and so we are re-procuring the contract and redeveloping the system. And so this is just re-appropriating the funds that were previously appropriated to continue that effort.

And then the last item is part of the administration's proposal to reorganize the Office of Planning and Research within the governor's office. One element or one program in that office is proposed to be transferred to CalHHS. That's the California Initiative to Advance Precision Medicine.

So that would just be a transfer of staff and $31 million in grant funds. The initiative had money had been appropriated over several prior years. They are in the process of spending down that money, mostly by doing grants for research. And so the staff who is overseeing those grants would be transferred to CalHHS, and we would manage the continued spend of that existing money. But there's no request for new money in this proposal. And those are our proposals.

Department of Finance.

Yeah. Joseph, Department of Finance. No additional comments at this time. Thank you.

Lao.

Ryan Miller, Legislative Analyst Office. We think the elimination of the accelerator is reasonable and we have no concerns to share on the other proposals at this time.

Okay, thank you very much. This concludes all of our issue items. Any closing remarks or you, Mr. Lee, before we go into public comment? No. We will move into the public comment mode. And remember, we will be giving two minutes each for public comment. Two minutes each for public comment.

That's more than I thought.

Let's make sure that we have everything working here. Can you? Is the mic on for? Okay. All right, let's begin. Name an affiliation, please.

Good afternoon, Mary Ignatius. I'm the executive director of Parent Voices California. On Friday, when the May revise came out, I immediately felt like I was experiencing PTSD from 2010. But the nightmare is worse this year because back then we didn't have a rainy day fund. We didn't have 70 billion in tax breaks to choose from.

And this year we do. And we really need the Assembly, with your leadership and the rest of the Legislature, to put revenues on the table. Otherwise, there's no negotiation. We need you to put revenues. I'm here on behalf of the 350 families that were here last week for Stand for Children Day.

We are here against the delays in promised childcare spaces, the commitment to a true cost of care for childcare providers, and we vehemently opposed the CalWORKS double cut. In May, the governor proposed to leave $11 billion in the rainy day fund. I'm sorry. In January. In May, he is proposing to keep 19 billion. So 8 billion is coming from every issue we just talked about over the last 4 hours. It is wrong. California has to do better. We need to do better. And we're looking for your leadership. And I'll leave these with you. Thank you.

Thank you very much. Name and affiliation, please.

Hi, Chair and members. Andrew Shane with GRACE End Child Poverty California. I'll align with my colleague Mary and those to come from Childcare Providers Union, SEIU, foster youth advocates. But I'll focus my time here on CalWORKS. We deeply oppose the double cut. As we've spoken to, and as you saw yesterday, we had families from across the state.

I just want you to know we had families in tears with the governor's office and with the Department of Finance. We're not only bringing them to spaces like this but to the administration to make sure they hear from impacted families. And it was brutal. We underscore that programs like family stabilization, mental health, and we appreciate your comments today. We are deeply against those cuts.

But if for whatever reason those proposals become real for those cuts, we point out that they not only provide life-saving services, they prevent sanction and we will demand hold harmless for those families so there is not a cruel double penalty of both losing those services and exposure to sanction until those services are restored.

On the wins, we not only oppose defunding but especially to remove it from the statute. We may need that again someday for the caseload erection credit and would point out that is an actual benefit cut. That's dollar 10 in food assistance. That is a tangible cut in this benefit.

And finally, we applaud the FRA authority that we're really excited to see the administration engage on the pilots and put some resources there. That is the step to land that proposal and we're super close. On Calfresh, we are against the delay and the cancellation of the minimum benefit.

On the trailer bill language, we do applaud the codification of skimming, but we need to make sure that families are made whole timely. So we have some changes coming to that trailer bill and again, defer to our partners on the rest of those issues. Thank you.

Thank you very much. Name, affiliation, please.

Good afternoon. Eileen Cubanski with the County Welfare Directors Association. The governor's May revision, coupled with the proposed cuts in January, shred the social safety net California and roll back a decade's worth of investments. Across the human services programs that my members administer, the administration has proposed a total of over $1.3 billion in cuts.

The CalWORKS program bears the brunt of those. It's got over $750 million in cuts, a lot of that ongoing. It includes the elimination of family stabilization and expanded subsidized employment, and now cuts to home visiting, which is highly successful, and behavioral health funding for CalWORKS clients, and a whopping $355 million cut to the single allocation.

Our eligibility work will be underfunded by over 50%. Under the May revision proposal, that's $400 million that we're going to need to transfer away from employment services to cover the mandated eligibility activities. And this in turn effectively leads to a 50% reduction in the funding available to us for case management and other supportive services.

These CalWORKS cuts decimate the family supports that make California's TANF program a leader among all others in the nation. We strongly object to these cuts, but to even sustain a portion of them, we will need statutory relief from the measures, the federal work participation rate penalty, and exemptions for certain clients from welfare to work requirements.

We oppose the proposed elimination of $50 million to county Human Services Agency for caregiver approvals. We're happy to provide more detailed information on the impact of that. The continued proposed elimination of fers, the SILP housing supplement, and now the cut to the emergency child care bridge program, are all direct cuts to supports, direct cuts to supports for caregivers and youth.

And while we continue to support the overall concept of the foster care rates proposal, we are extremely disappointed to see that the Administration has just none of County Human Services Agency's primary concerns in their revised trailer bill language.

We have significant operational concerns with several areas of the proposal that we believe, if not addressed, will hinder counties' ability to provide services to youth and families, reduce capacity in the system, and result in a costly and large new state bureaucracy. The new trigger language is certainly disappointing, but understandable.

It does, though, call into question the continued commitment of the administration financially to the proposal. Lastly, we object to the APS cuts. These are cuts that are going to impact the lives, literally the lives, of older adults in California and especially the 4.6 million in training cuts.

Once that infrastructure is gone, it will be extremely difficult, if not impossible, to get it back. We're grateful that benefit levels themselves have been preserved. But make no mistake, the proposed cuts will negatively impact eligible Californians' ability to access all of those benefits and do represent cuts to core services. Thank you for all your time.

Thank you very much. Name and affiliation, please.

Thank you. Darby Kernan on behalf of two different on two different issues. First, I want to say thank you for taking the time and listening to everybody and for holding these hearings over the last few months. It's been really important for everyone and we greatly appreciate it.